How Much Are You Willing to Pay for One Share

question 31

Multiple Choice

How much are you willing to pay for one share of stock if the company just paid an $.80 annual dividend,the dividends increase by 4% annually and you require an 8% rate of return?

• A) $19.23
• B) $20.00
• C) $20.40
• D) $20.80
• E) $21.63

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Definitions:

Local Villagers

Residents of a small rural community or village, typically characterized by a close-knit social structure and a reliance on local resources for livelihood.

Henry Kissinger

A German-born American diplomat and political scientist who served as Secretary of State and National Security Advisor under the presidential administrations of Richard Nixon and Gerald Ford.

Private Citizen

An individual who does not hold any official or public position and is not involved in the affairs of government.

Harvard Professor

A faculty member at Harvard University, typically involved in teaching and research activities.