Laurentide Union Bank Is Expected to Pay a Dividend of $4.20

question 54

Multiple Choice

Laurentide Union Bank is expected to pay a dividend of $4.20 per share in one year.The dividend is expected to grow at a rate of 5 percent forever.If the current market price for a share of Laurentide Union Bank is $40,what is the cost of equity?

• A) 5.00%
• B) 9.52%
• C) 10.50%
• D) 15.50%

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Definitions:

Endocrine Gland

Glands of the endocrine system that secrete their products, hormones, directly into the blood rather than through a duct.

Pituitary

A small endocrine gland located at the base of the brain, often termed the "master gland," it plays a crucial role in regulating vital body functions and general wellbeing.

Microelectrode

A small wire used to monitor the electrical activity of or stimulate activity within a single neuron.

Electrical Activity

The movement of charged particles, such as ions, within cells or tissues, crucial for functions in the nervous system and heart.