A Common Stock Is Expected to Generate an End-Of-Period Dividend

question 81

Multiple Choice

A common stock is expected to generate an end-of-period dividend of $5 and an end-of-period price of $62.If this security has a beta coefficient of 1.3,the risk-free interest rate is 10%,and the expected return on the market portfolio is 19%,then what is the value of this security today?

• A) $55.50
• B) $59.98
• C) $55.05
• D) $56.30

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Definitions:

Order-Relevant Principle

involves the idea that the sequence or arrangement of elements or events can significantly affect understanding, memory, or perception.

Abstraction Principle

A concept in computer science and mathematics where specific instances are generalized to a set of properties or behaviors, facilitating generality and reuse.

Vai People

An ethnic group predominantly found in Liberia, known for their unique syllabary writing system.

Literacy

The ability to read, write, understand, and communicate using text.