Use the Information for the Question(s)below

question 74

Multiple Choice

Use the information for the question(s) below.
Defenestration Industries plans to pay a $4.00 dividend this year and you expect that the firm's earnings are on track to grow at 5% per year for the foreseeable future.Defenestration's equity cost of capital is 13%.
-Assuming that Defenestration's dividend payout rate and expected growth rate remain constant,and Defenestration does not issue or repurchase shares,then Defenestration's stock price is closest to:

• A)$50.00.
• B)$32.30.
• C)$22.25.
• D)$30.75.

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Definitions:

Banking System

The structural network of financial institutions, including central banks and commercial banks, that provides financial services to the economy.

Credit Cards

Financial tools issued by banks allowing users to borrow funds for purchases, subject to repayment with interest.

M2

A classification of money supply that includes cash, checking deposits, and easily convertible near money like savings deposits, money market securities, and mutual funds.

Money Supply

The total financial assets existing in an economy at a specific period, incorporating cash, coins, and the balances maintained in checking and savings accounts.