A Stock Is Expected to Pay a $4

question 112

Multiple Choice

A stock is expected to pay a $4.00 dividend per share. The growth rate is expected to be −1 percent. If investors demand 8 percent on this stock, what is the expected price of the stock three years from now?

• A) $54.68
• B) $52.17
• C) $41.06
• D) $43.12

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Definitions:

Naturalistic

Pertaining to an approach or method that is based on natural conditions and inherent tendencies, often used in research or design thinking.

Ethnography

A qualitative research method used in social sciences to study cultures and communities through direct observation, participant observation, and other immersive techniques.

Unpredictable

Capable of changing or varying in a way that is not expected.