Use the Following Information to Answer the Question(s) Below

question 20

Multiple Choice

Use the following information to answer the question(s) below.
Nielson Motors has a share price of $50.00. Its dividend was $2.50, and you expect Nielson Motors to raise its dividend by approximately 6% per year in perpetuity.
-Vacinox is a biotechnology firm that is about to announce the results of its clinical trials of a potential new vaccine.If the trials are successful,Vacinox stock will be worth $80 per share.However,if the trials are not successful,then Vacinox stock will only be worth $12 per share.If on the morning that the announcement is schedule,Vacinox stock is trading for $60.96,then the probability that investors place on the trials being successful are closest to:

• A) 48%
• B) 50%
• C) 60%
• D) 72%

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Definitions:

Basic Research

Fundamental scientific research aimed at increasing knowledge or understanding of the subject without immediate practical application in mind.

Applied Research

A form of systematic inquiry involving the practical application of science. It accesses and uses some part of the research communities' (the academia's) accumulated theories, knowledge, methods, and techniques, for a specific, often state-, business-, or client-driven purpose.

Darwin's Theory

The scientific theory of biological evolution that explains how species evolve over time through natural selection.

Functionalists

Scholars in various fields, especially in sociology and psychology, who study how societal institutions and processes function to meet the needs of a society or an individual.