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:

Economic Well-Being

A measure of the economic success and quality of life for individuals and nations, often evaluated through income levels, employment rates, and access to resources.

Leisure Time

Free time that an individual can use for relaxation, recreation, or personal pursuits, not consumed by work or essential domestic activities.

Multiple Counting

In economics, it refers to the error of counting the same product or value more than once when calculating gross domestic product.

Psychic Costs

The mental and emotional energy expended by an individual in the process of decision-making or as a result of stressful economic conditions.