Harbour Corporation Pays a Dividend of $2

question 102

Multiple Choice

Harbour Corporation pays a dividend of $2.15 per year,which is expected to grow at a rate of 3% per year.Harbour has a cost of capital of 12%,and an EPS of $4.42.Its competitor,Pallantine Inc.,pays a yearly dividend of $1.25 per year,which is expected to grow at a rate of 6% per year.Pallantine has an EPS of $5.19.What would be the expected price of Pallantine stock,if estimated using the method of comparables?

• A)$19.33
• B)$20.84
• C)$23.89
• D)$21.04
• E)$28.05

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Definitions:

Pituitary Gland

A small, pea-sized gland located at the base of the brain, often termed the "master gland" for its role in regulating other glands and bodily functions.

Pituitary Gland

A small, pea-sized gland located at the base of the brain, crucial for regulating vital body functions and the endocrine system.

Hypothalamus

A brain region controlling various bodily functions, including temperature, hunger, thirst, fatigue, sleep, and circadian cycles.

Suffix

An affix that is added at the end of a word to form a derivative or give it a particular grammatical function.