Last Week,Railway Cabooses Paid Its Annual Dividend of $1

question 70

Multiple Choice

Last week,Railway Cabooses paid its annual dividend of $1.20 per share. The company has been reducing the dividends by 10% each year. How much are you willing to pay to purchase stock in this company if your required rate of return is 14%?

• A) $4.50
• B) $7.71
• C) $10.80
• D) $15.60
• E) $27.00

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