A Stock Is Expected to Pay $0

question 70

Multiple Choice

A stock is expected to pay $0.80 per share every year indefinitely.If the current price of the stock is $18.90,and the equity cost of capital for the company that released the shares is 6.4%,what price would an investor be expected to pay per share five years into the future?

• A)$12.50
• B)$20.43
• C)$21.23
• D)$22.65
• E)$22.90

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Definitions:

Strategy Outsourcing

The practice of delegating specific strategic tasks or operations to external organizations, focusing on core competencies.

Operating Objectives

Specific, short-term targets set by an organization to guide daily operations and ensure alignment with overall strategic goals.

Strategic Objectives

High-level goals that an organization sets to guide its direction and development, aligning with its mission, vision, and overarching strategies.

Corporate Objectives

The goals or targets that a corporation aims to achieve, which guide its operational and strategic decisions.