Owen Inc Has a Current Stock Price of $15

question 6

Multiple Choice

Owen Inc. has a current stock price of $15.00 and is expected to pay a $0.80 dividend in one year. If Owen's equity cost of capital is 12%, what price would its stock be expected to sell for immediately after it pays the dividend?

• A) $11.20
• B) $12.80
• C) $16.80
• D) $16.00

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Definitions:

Archaeologist

A professional who studies human history and prehistory through the excavation of sites and the analysis of artifacts and other physical remains.

Burial Ground

A piece of land designated for the burial of the dead, often associated with cultural, religious, or social significance.

Artifacts

Objects made by human beings, typically of cultural or historical interest.

Finder's Keepers

A common adage suggesting that a person who finds something abandoned or lost may claim ownership of it.