Expected Return a Company's Current Stock Price Is $22

question 95

Multiple Choice

Expected Return A company's current stock price is $22.00 and its most recent dividend was $0.75 per share.Since analysts estimate the company will have a 12 percent growth rate,what is its expected return?

• A)3.00 percent
• B)3.48 percent
• C)12.00 percent
• D)15.82 percent

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Definitions:

Technological Limitations

Constraints or restrictions imposed by the current state of technology, hindering progress or achieving certain goals.

NPV

Net Present Value, a financial metric that calculates the present value of all cash flows associated with an investment, including both inflows and outflows, discounted at the project's cost of capital.

Present-Value Equivalent

A calculated amount representing the current value of a future sum of money or stream of cash flows, given a specified rate of return.

Cost of Funds

The interest rate that banks and other financial institutions pay for the use of funds deposited in their accounts by savers or obtained from other external sources.