Use the Information for the Question(s)below

question 50

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%.
-Assume that management makes a surprise announcement that JRN will no longer pay dividends but will use the cash to repurchase stock instead.The price of a share of JRN's stock is now closest to:

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

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Definitions:

Software Package

A collection of computer programs, procedures, and related documentation that serve a specific function or set of functions.

Sinoatrial Node

A small group of cells in the right atrium of the heart that acts as the natural pacemaker by initiating the heartbeat.

Atrioventricular Node

A part of the electrical conduction system of the heart that coordinates the top of the heart. It plays a critical role in regulating the timing of heart contractions.

Bundle of His

A collection of heart muscle cells specialized for electrical conduction that transmits impulses from the AV node to the ventricles of the heart.