Use of Financial Calculator TI BA II Plus Required

question 83

Multiple Choice

Use of Financial Calculator TI BA II Plus required. What would you pay for a stock whose price you estimate will be $50 in ten years and you wish to earn a return on the investment of 9 percent? Ignore brokerage commissions and tax implications and assume that the stock paid no dividends during the holding period.

• A)$45
• B)$41
• C)$21.10
• D)$15

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Definitions:

Retained Earnings

The portion of net income that is not distributed to shareholders as dividends but is kept by the company for reinvestment or to pay off debt.

Functional Currency

The functional currency is the currency of the primary economic environment in which an entity operates and conducts its business transactions.

Balance Sheet Items

Components that make up a balance sheet, including assets, liabilities, and shareholders' equity.

Historic Rate

The exchange rate used to convert foreign currency transactions to the reporting currency at the date of the transaction, for accounting purposes.