Data for a Share of Common Stock of ABC Company

question 138

Multiple Choice

Data for a share of common stock of ABC Company appear below:
Dividend: 2005 actual $ 1.000
2006 actual 1.100
2007 actual 1.210
2008 expected 1.331
Current market price per share: $20.000
Assuming the dividend pattern above will continue in the future and also assuming that it is the first of January,2008,the estimated future return for the stock is

• A)6.67%.
• B)10.00%.
• C)6.05%.
• D)16.67%.

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Definitions:

Reasonable Decision

A choice made after careful consideration of facts and logical reasoning, often seen as sensible or practical.

Problem Recognition

The initial step in the decision-making process where individuals realize the difference between their current state and a desired state.

Satisficing Solution

A decision-making strategy that aims for a solution that is good enough, rather than optimal, based on the available information and resources.

Herbert Simon

An economist, political scientist, and cognitive psychologist who made significant contributions to the fields of artificial intelligence, economics, and cognitive psychology, and who was awarded the Nobel Prize in Economics in 1978.