A Stock Is Expected to Pay a $5

question 18

Multiple Choice

A stock is expected to pay a $5.00 dividend per share. The growth rate is expected to be −2 percent. If investors demand 8 percent on this stock, what is the expected price of the stock five years from now?

• A) $54.68
• B) $45.20
• C) $41.06
• D) $53.12

---

Definitions:

Undue Influence

A legal term referring to a situation where a person takes advantage of their power over another person, leading to unfair agreements.

Unsound Mind

A state or condition in which an individual lacks the legal or mental capacity to manage personal affairs or understand the consequences of actions.

Intestate Succession

The process by which property passes to others when people die without a will.

Antique Car Collection

The hobby or business of collecting cars from earlier periods, typically those that possess historical value or unique characteristics.