Valorous Corporation Will Pay a Dividend of $1

question 22

Multiple Choice

Valorous Corporation will pay a dividend of $1.80 per share at this year's end and a dividend of $2.40 per share at the end of next year.It is expected that the price of Valorous' stock will be $44 per share after two years.If Valorous has an equity cost of capital of 8%,what is the maximum price that a prudent investor would be willing to pay for a share of Valorous stock today?

• A)$39.27
• B)$40.22
• C)$41.45
• D)$42.40

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Definitions:

Labor Movement

The Labor Movement is a social and political movement advocating for the rights of workers, including better wages, working conditions, and labor laws, significant in improving the lives of workers worldwide.

Un-American

A term used to describe actions, behaviors, or beliefs that are considered to significantly deviate from or oppose what is perceived as typical American ideals or values.

Statue of Liberty

A colossal neoclassical statue on Liberty Island in New York Harbor, symbolizing freedom and democracy and serving as a welcome to arriving immigrants.

Assassination

The act of killing a prominent or significant individual, often for political or ideological reasons.