A Stock You Are Interested in Paid a Dividend of $1

question 51

Multiple Choice

A stock you are interested in paid a dividend of $1 last week. The anticipated growth rate in dividends and earnings is 20% for the next year and 10% the year after that before settling down to a constant 5% growth rate. The discount rate is 12%. Calculate the expected price of the stock.

• A) $17.20
• B) $17.90
• C) $18.20
• D) $19.40
• E) $19.75

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Definitions:

Evolutionary Psychology

The study of how evolutionary principles help explain the structure and function of the human mind.

Cultural Psychologist

A psychologist who studies how cultural traditions and social practices influence human behavior, thoughts, and emotions.

Cognitive Errors

Mistakes in reasoning, evaluating, remembering, or other cognitive processes, often occurring due to holding onto personal biases or irrational beliefs.

Positive Psychology

A branch of psychology that focuses on studying and promoting well-being and happiness.