Adelaide Industries Expects to Have Earnings Per Share of $3

question 121

Multiple Choice

Adelaide Industries expects to have earnings per share of $3.20 in the coming year.Adelaide has a return on new investment of 11%.If the firm's dividend payout rate is 60%,and its equity cost of capital is 8%,what is the value of Adelaide's stock?

• A)$24.00
• B)$53.33
• C)$40.00
• D)$88.89
• E)$91.43

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Definitions:

Managerial Decision Making

The process by which managers select among available options to make choices that will benefit their organization.

Time Constraints

The limitations on the amount of time available to complete a task or project.

Rational Model

A decision-making approach that assumes individuals make decisions based on complete information, weighing all alternatives to choose the most satisfactory option.

Consistent System

A system where all parts work together without contradiction, ensuring stability and predictability in its operations.