What Would Be the Maximum an Investor Should Pay for the Common

question 1

Multiple Choice

What would be the maximum an investor should pay for the common stock of a firm that has no growth opportunities but pays a dividend of $1.36 per year? The required rate of return is 12.5 percent.

• A)$9.52
• B)$10.88
• C)$11.24
• D)$10.64
• E)$11.47

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Definitions:

Absenteeism

The habitual non-presence of an employee at their job, which can be a significant issue for employers in terms of productivity and efficiency.

Older Employees

Individuals in the workforce who are typically beyond the average age of retirement, often possessing extensive experience and knowledge.

Experience Stress

the psychological and physical state of being under pressure or tension, which can arise from challenging or demanding circumstances.