Extruded Elements Extruded Elements Had Net Income of $25,000,000 Last Year, and Year

question 101

Multiple Choice

Extruded Elements
Extruded Elements had Net Income of $25,000,000 last year, and $26,250,000 this year (in line with its long-term earnings growth rate) . There are 4,000,000 shares outstanding, and the firm follows a policy of paying 30% of its earnings out as dividends
-The required rate of return on Extruded's shares is 13%.What is the share price today based on the Gordon growth model?

• A) $16.00
• B) $23.44
• C) $24.63
• D) $25.88

---

Definitions:

Postpartum Blues

Mild, temporary depression experienced by some mothers shortly after giving birth.

Negative Effects

Unfavorable or harmful outcomes resulting from a specific action, condition, or decision.

Parenthood

The state or responsibilities of being a parent; includes the care, upbringing, and nurturing of a child.

Fertility Rates

The average number of children born to a woman over her lifetime within a population.