Use the Following Information to Answer the Question(s) Below

question 66

Multiple Choice

Use the following information to answer the question(s) below.
Nielson Motors has a share price of $50.00. Its dividend was $2.50, and you expect Nielson Motors to raise its dividend by approximately 6% per year in perpetuity.
-If Nielson's equity cost of capital is 13%,then Nielson's expected share price is closest to:

• A) $19.23
• B) $35.71
• C) $41.67
• D) $50.00

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Definitions:

Inventory System

Methods and procedures used to track materials, work-in-progress, and finished goods from acquisition through sale.

Weighted-Average

A calculation method where different data points are given different weights, often used in inventory valuation and cost accounting.

Ending Inventory

The final amount of goods available for sale at the end of an accounting period.

Perpetual System

An inventory system that continually updates inventory records and cost of goods sold after each purchase or sale.