Beta Corp Has an ROE of 15%; Has Just Paid

question 76

Multiple Choice

Beta Corp has an ROE of 15%; has just paid a dividend of $1.50; a pays 10% of its earnings out in dividends,and the appropriate discount rate is 20%; what is the current stock price?

• A) $ 7.50
• B) $ 26.19
• C) $ 11.35
• D) $ 31.43

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Definitions:

Common People

Refers to the average individuals in a society who are not part of the nobility, wealthy, or ruling classes, often working in agriculture or manual labor sectors.

Montesquieu

A French political philosopher of the Enlightenment era, best known for his theory of separation of powers.

Voltaire

Voltaire, the pen name of François-Marie Arouet, was a French Enlightenment writer, historian, and philosopher known for his advocacy of freedom of speech, separation of church and state, and civil liberties.