Coolibah Holdings Is Expected to Pay Dividends of $1

question 15

Multiple Choice

Coolibah Holdings is expected to pay dividends of $1.20 every six months for the next three years.If the current price of Coolibah stock is $22.40,and Coolibah's equity cost of capital is 16%,what price would you expect Coolibah's stock to sell for at the end of three years?

• A)$26.74
• B)$28.82
• C)$29.34
• D)$31.36

---

Definitions:

Kilos

A metric unit of mass equal to one thousand grams or approximately 2.20462 pounds.

Direct Materials

Raw materials that can be directly traced to the production process and are a significant part of the finished product.

Raw Material

The basic substances or components that are processed and transformed into finished goods in manufacturing.

Fixed Overhead Volume Variance

The difference between the budgeted and actual volume of production, multiplied by the fixed overhead rate, indicating how fixed costs are allocated over different levels of output.