OwenInc Has a Current Stock Price of $14

question 46

Multiple Choice

OwenInc has a current stock price of $14.50 and is expected to pay a $0.85 dividend in one year.If OwenInc's equity cost of capital is 12%,what price would OwenInc's stock be expected to sell for immediately after it pays the dividend?

• A)$12.18
• B)$13.65
• C)$15.29
• D)$15.39

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Definitions:

Bank Reconciliation

The process of matching and comparing figures from the accounting records against those shown on a bank statement to ensure consistency.

Days' Sales Uncollected

Days' sales uncollected is a financial metric that estimates the average number of days it takes for a company to collect payments from its credit sales, reflecting on the efficiency of its credit and collection policies.

Receivables

Amounts owed to a company by its customers for goods or services provided on credit.

Internal Control

Strategies and systems put in place by an organization to maintain the reliability of its financial and accounting data, encourage responsible behavior, and deter deceitful practices.