The Correct Price of a Share with a Cost of Capital

question 24

Multiple Choice

The correct price of a share with a cost of capital of 25% p.a.that pays $0.28 p.a.dividends in perpetuity is:

• A) \( \$ 1.12 \)
• B) \( \$ 1.20 \)
• C) \( \$ 0.89 \)
• D) \( \$ 0.07 \)

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Definitions:

Catholicism

The Christian denomination led by the Pope in Rome, characterized by its sacraments, doctrines, and global presence.

English

A West Germanic language originating in England, now the primary language of the United Kingdom, the United States, and several other countries.

Indians

Indigenous peoples of the Americas; also, in a different context, can refer to nationals or citizens of India.

Land and Liberty

A slogan used historically in various agrarian and revolutionary movements to advocate for land reform and individual freedom.