JK IncIs a Very Cyclical Type of Business Which Is Reflected

question 72

Multiple Choice

JK Inc.is a very cyclical type of business which is reflected in its dividend policy.The firm pays a dividend of $2.00 a share every other year with the last payment having just been paid.Five years from now,the company is repurchasing all of the outstanding shares at a price of $50 a share.What is the current value of one share at a discount rate of 12 percent?

• A)$34.03
• B)$31.24
• C)$33.78
• D)$27.89
• E)$34.99

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Definitions:

Unemployment Compensation

Unemployment compensation refers to the financial assistance provided by the government to unemployed workers who meet certain eligibility criteria, aiming to reduce the economic burden of unemployment.

Employers

Entities or individuals that hire and employ workers, providing compensation in exchange for the performance of job duties and contributing to the labor market dynamics.

Lorenz Curve

The Lorenz curve is a graphical representation of the distribution of income or wealth within a society, illustrating inequalities.

Income Inequality

The unequal distribution of an economy’s total income among households or families.