A Firm Does Not Pay a Dividend

question 86

Multiple Choice

A firm does not pay a dividend. It is expected to pay its first dividend of $0.10 per share in two years. This dividend will grow at 11 percent indefinitely. Using a 13 percent discount rate, compute the value of this stock.

• A) $4.42
• B) $4.59
• C) $5.43
• D) $7.21

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Definitions:

Superordinate Goals

Attractive outcomes that can be achieved only by collaboration.

Collaboration

The act of working together with one or more people in order to achieve a common goal or project.

Assertive

Being confident and bold in stating one’s demands or opinions without being aggressive.

Superordinate Goal

An objective that can only be achieved by the cooperation and collaboration of two or more groups, which often leads to reduced conflict and increased unity.