If the Last Dividend on Markowitz Trucking Stock Was $2

question 1

Multiple Choice

If the last dividend on Markowitz Trucking stock was $2 per share and if dividends are expected to grow 10% annually,what is the share price if the required return is 12%?

• A) $100
• B) $155
• C) $110
• D) $125
• E) $130

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Definitions:

Assignment Form

A legal document used to transfer rights or interests from one party to another.

Privity of Contract

The principle that a contract is a private agreement between the contracting parties only, and as such, only these parties have rights and obligations under the contract.

Incidental Beneficiary

One who unintentionally gains a benefit from a contract between other parties.

Donee Beneficiary

A third party who benefits from a contract in which a promisor agrees to give a gift to the third party.