The Current Price of DEF Corporation Stock Is $26

question 8

Multiple Choice

The current price of DEF Corporation stock is $26.50 per share. Earnings next year should be $2 per share and it should pay a $1 dividend. The P/E multiple is 15 times on average. What price would you expect for DEF's stock in the future?

• A) $13.50
• B) $15.00
• C) $26.50
• D) $30.00

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Definitions:

Pectin

A natural polysaccharide found in fruits, used as a gelling agent in food production.

Parenchyma

A type of plant tissue composed of living cells, usually having only thin primary walls and varying widely by morphology and metabolism.

Photosynthesis

The process by which green plants and some other organisms use sunlight to synthesize foods with carbon dioxide and water, producing oxygen as a byproduct.

Replanting

The action of planting plants or seeds in the ground again, often to regenerate an area of forest or to grow a new crop.