Coolibah Holdings Is Expected to Pay Dividends of $1

question 57

Multiple Choice

Coolibah Holdings is expected to pay dividends of $1.20 every six months for the next three years. If the current price of Coolibah stock is $22.60, and Coolibah's equity cost of capital is 18%, what price would you expect Coolibah's stock to sell for at the end of three years?

• A) $28.87
• B) $31.76
• C) $33.20
• D) $34.64

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Definitions:

Service Shops

Businesses that provide intangible products, such as maintenance or repair services, to their customers.

Travel Agencies

Companies that provide travel and tourism-related services to the public, such as booking airline tickets, hotels, and tours.

Downstream Costs

Expenses incurred after the production process, including distribution, marketing, and customer service costs.

Customer Support

A service provided by a company to assist its customers in making cost-effective and correct use of a product, including assistance in planning, installation, training, troubleshooting, maintenance, upgrading, and disposal of a product.