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:

Currency

A system of money in general use in a particular country or economic context, also refers to the digital or physical form of money.

Auto

Short for "automatic," this term refers to functions or features that operate without manual intervention.

Integer

A whole number that can be positive, negative, or zero, not including fractions or decimals.

Currency Format

A way of displaying numbers in a specific monetary style, which includes symbols, decimal places, and digit grouping according to different cultural norms.