Use the Information for the Question(s)below

question 62

Multiple Choice

Use the information for the question(s) below.
Von Bora Corporation is expected to pay a dividend of $1.40 per share at the end of this year and a $1.50 per share at the end of the second year.You expect Von Bora's stock price to be $25.00 at the end of two years.Von Bora's equity cost of capital is 10%.
-Suppose you plan to hold Von Bora stock for one year.The price one would expect to be able to sell a share of Von Bora stock for in one year is closest to:

• A)$26.50.
• B)$22.70.
• C)$23.15.
• D)$24.10.

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Definitions:

Standard Rate

A predetermined cost or charge that applies to a particular activity, operation, or product within a business environment.

Fixed Factory Overhead Volume Variance

A measure used in cost accounting to determine the difference between the budgeted and actual volume of production, affecting fixed overhead costs.

Standard Costs

Standard costs are the predetermined costs associated with manufacturing a product or delivering a service, used as benchmarks to measure performance.

Actual Costs

The real expenses incurred in the production or acquisition of goods and services.