Use the Information for the Question(s) Below

question 81

Multiple Choice

Use the information for the question(s) below.
Von Bora Corporation is expected pay a dividend of $1.40 per share at the end of this year and $1.50 per share at the end of the second year. You expect Von Bora's stock price to be $25.00 at the end of two years. Von Bora's equity cost of capital is 10%.
-Suppose you plan to hold Von Bora stock for one year.The price you would expect to be able to sell a share of Von Bora stock at in one year is closest to:

• A) $26.50
• B) $22.20
• C) $23.15
• D) $24.10

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Definitions:

Predict

To make an educated guess about the outcome of an event based on current information or data analysis.

Dependent Variable

A variable in statistical modeling and experiments whose value is influenced or predicted by other variables.

Independent Variable

A variable thought to be the cause or predictor of changes in a dependent variable.

Regression Function

An equation in mathematics that illustrates how one or more variables that can vary independently affect a variable that depends on them.