Bavarian Sausage Is Expected to Pay a $1

question 51

Multiple Choice

Bavarian Sausage is expected to pay a $1.57 dividend next year and investors expect that dividend to grow by 5% each year forever.If the required return on the stock investment is 14%,what should be the price of the stock today.

• A) $18.32
• B) $17.44
• C) $11.21
• D) $25.37

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Definitions:

Cancer

A disease characterized by the uncontrolled growth and spread of abnormal cells that can lead to death if not treated.

Type A Personality

A personality type characterized by competitiveness, urgency, aggressiveness, and a constant feeling of being under time pressure.

Antisocial Personality

A personality disorder characterized by a long term pattern of disregard for, or violation of, the rights of others.

Borderline Personality

A mental disorder characterized by unstable moods, behavior, and relationships.