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:

Plaintiff

The person who brings a case against another in a court of law.

Defendant

An individual, company, or entity that is being sued or accused in a court of law.

Lawsuit

A legal action brought in court by one party against another seeking a remedy for a wrong or damage.

Versus

A preposition used in legal contexts to indicate a dispute or argument between two parties, often abbreviated as "v." in case titles.