Garville Corporation Has a Current Stock Price of $7

question 59

Multiple Choice

Garville Corporation has a current stock price of $7.43 and is expected to sell for $8.14 in one year's time,immediately after it pays a dividend of $0.35.Which of the following is closest to Garville's equity cost of capital?

• A)4.8%
• B)6.1%
• C)6.7%
• D)9.6%
• E)14.3%

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Definitions:

Discouraged Worker

A person who has stopped searching for a job because he or she believes that job hunting is futile.

Chronically Unemployed

Individuals who are repeatedly without a job and actively seeking work for long periods.

Job-Hunting Efforts

Activities and measures taken by individuals to find employment, including networking, submitting applications, and attending interviews.

Part-Time Worker

An employee who works fewer hours than the full-time threshold, often with a flexible schedule and reduced benefits.