A Stock Is Expected to Pay $0

question 20

Multiple Choice

A stock is expected to pay $0.80 per share every year indefinitely.If the current price of the stock is $18.90,and the equity cost of capital for the company that released the shares is 6.4%,what price would an investor be expected to pay per share five years into the future?

• A)$12.50
• B)$20.43
• C)$21.23
• D)$22.65

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Definitions:

Strengthened

Enhanced or made stronger in attributes, capabilities, or quality.

Narcissism

A personality trait characterized by an inflated sense of self-importance, a need for excessive attention and admiration, and a lack of empathy for others.

Online Profiles

Digital representations of individuals or organizations on internet platforms, consisting of personal, professional, and social information intended for public or specific audiences.

Autonomy

The capacity and right of individuals to make their own choices and decisions, free from external control or influence.