A Stock Is Expected to Pay a Dividend of $3

question 15

Multiple Choice

A stock is expected to pay a dividend of $3.00 in one year.To purchase the stock,investors seek a 15% annual return.If the stock is currently trading at $60,what is the implied constant growth rate in dividends for the future?

• A) 5%
• B) 10%
• C) 15%
• D) 20%

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Definitions:

Motivation

Represents the internal and external factors that stimulate desire and energy in people to be continually interested and committed to a job, role, or subject.

Intrinsic Motivation

The drive to perform activities for their own sake and for the personal rewards they bring, rather than for external rewards.

Extrinsic Motivation

A form of motivation driven by external rewards, such as money, grades, or recognition, rather than by inherent interest in the activity itself.

Autonomous Motivation

Self-motivation or intrinsic motivation that occurs when people feel they are in control of their motivation.