Use the Information for the Question(s)below

question 1

Multiple Choice

Use the information for the question(s) below.
The JRN Corporation will pay a constant dividend of $3 per share,per year,in perpetuity.Assume that all investors pay a 20% tax on dividends and that there is no capital gains tax.The cost of capital for investing in JRN stock is 12%.
-The price of a share of JRN's stock is closest to:

• A)$20.00.
• B)$24.00.
• C)$25.00.
• D)$18.00.

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Definitions:

Joint Ventures

A business arrangement where two or more parties agree to pool their resources for the purpose of accomplishing a specific task, project, or business activity.

Direct Investment

The purchase or acquisition of a controlling interest in foreign businesses, assets, or properties.

Global Sourcing

The practice of seeking resources, goods, or services from the global market, typically to leverage cost advantages, expertise, or efficiencies.

Diversification

A risk management strategy that mixes a wide variety of investments within a portfolio.