Matilda Industries Pays a Dividend of $2

question 44

Multiple Choice

Matilda Industries pays a dividend of $2.25 per share and is expected to pay this amount indefinitely.If Matilda's equity cost of capital is 12%,which of the following would be expected to be closest to Matilda's stock price?

• A)$12.25
• B)$14.65
• C)$18.75
• D)$21.98

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Definitions:

Prostaglandins

A group of lipid compounds that have diverse hormone-like effects in animals, including mediating inflammation and pain.

Fructose

A simple sugar found in many plants, sweeter than glucose, and commonly used in the food industry, especially in fruits, honey, and high-fructose corn syrup.

Basic Fluid

A fluid with a pH above 7, indicating a lower concentration of hydrogen ions and often associated with alkalinity.

Mucus

A sticky secretion composed of covalently linked protein and carbohydrate; serves to lubricate body parts and trap particles of dirt and other contaminants. (The adjectival form is spelled mucous.)