Danforth Corp Has a Current Stock Price of $117

question 43

Multiple Choice

Danforth Corp has a current stock price of $117.15 and is expected to pay a dividend of $4.50 in one year.If Danforth's equity cost of capital is 10%,what price would Danforth's stock be expected to sell for immediately after it pays the dividend?

• A)$124.37
• B)$128.87
• C)$121.65
• D)$112.65
• E)$113.06

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Definitions:

Composition Carbon

Likely refers to carbon composition resistors, electronic components made from carbon dust or graphite paste, used for their stable electrical resistance.

Variable Resistor

An electronic component that can adjust the flow of electrical current through it by changing its resistance.

Potentiometer

A variable resistor with a sliding contact that is used as a voltage divider.

Composition Carbon

A resistor type made from compressed carbon or graphite mixture, known for its stability and reliability in a range of electrical applications.