Use the Information for the Question(s)below

question 1

Multiple Choice

Use the information for the question(s) below.
The JRN Corporation will pay a constant dividend of $3 per share,per year,in perpetuity.Assume that all investors pay a 20% tax on dividends and that there is no capital gains tax.The cost of capital for investing in JRN stock is 12%.
-The price of a share of JRN's stock is closest to:

• A)$20.00.
• B)$24.00.
• C)$25.00.
• D)$18.00.

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Definitions:

Transferred Out

This term is used in accounting to describe costs or goods that are moved from one production process or department to another.

Materials

Raw substances used in the manufacturing process to create a finished product.

Equivalent Unit

A concept used in cost accounting to convert partially completed goods into a number of completed units for accounting purposes, considering the degree of completion.

First Processing Department

The initial stage in a manufacturing process where raw materials are first transformed into work-in-process.