A Stock Is Expected to Pay $1

question 30

Multiple Choice

A stock is expected to pay $1.25 per share every year indefinitely and the equity cost of capital for the company is 7.5%.What price would an investor be expected to pay per share ten years in the future?

• A)$16.67
• B)$25.01
• C)$33.34
• D)$41.68
• E)$12.50

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Definitions:

Sample Proportions

The fraction or percentage of the sample that represents a particular trait or characteristic of interest.

Control Chart

A graphical tool for monitoring process stability and variability by plotting measured values against predetermined control limits.

P Chart

A type of control chart used for monitoring the proportion of defective items in a process over time, useful in quality control.

Standard Deviation

An index of the amount of variability in a set of data points, indicating average distance from the dataset's mean value.