Value of Dividends and Future Price a Firm Is Expected

question 96

Multiple Choice

Value of Dividends and Future Price A firm is expected to pay a dividend of $3.00 next year and $3.21 the following year.Financial analysts believe the stock will be at their target price of $80.00 in two years.Compute the value of this stock with a required return of 13 percent.

• A)$50.00
• B)$67.52
• C)$67.82
• D)$86.21

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Definitions:

Feldspar

A group of silicate minerals that are among the most abundant minerals in the Earth's crust, commonly found in igneous, metamorphic, and sedimentary rocks.

Calcite

A common naturally occurring calcium carbonate mineral, often found in sedimentary rocks, and the primary mineral that makes up limestone.

Chemical Elements

Substances that cannot be broken down into simpler substances by chemical means, and are defined by the number of protons in their atomic nuclei.

Reddish Streak

The color mark left by a mineral when it is dragged across an unglazed porcelain plate.