A Stock Is Expected to Pay $0

question 7

Multiple Choice

A stock is expected to pay $0.70 per share every year indefinitely. If the current price of the stock is $18.90, and the equity cost of capital for the company that released the shares is 7.9%, what price would an investor be expected to pay per share five years into the future?

• A) $8.86
• B) $14.18
• C) $14.62
• D) $15.06

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Definitions:

Internal, Stable, and Global

Terms used in psychology to describe an individual's attribution style that perceives causes of events as internal to oneself, unchanging over time, and consistent across different contexts.

Optimism

A mental attitude reflecting a belief or hope that the outcome of some specific endeavor, or outcomes in general, will be positive, favorable, and desirable.

Self-Efficacy

The belief in one's own ability to succeed in specific situations or accomplish a task, influencing how goals, tasks, and challenges are approached.

High Self-Efficacy

Refers to an individual's belief in their capability to execute behaviors necessary to produce specific performance attainments.