A Stock Is Expected to Pay $1

question 27

Multiple Choice

A stock is expected to pay $1.25 per share every year indefinitely and the equity cost of capital for the company is 8.4%. What price would an investor be expected to pay per share ten years in the future?

• A) $14.88
• B) $22.32
• C) $29.76
• D) $37.20

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Definitions:

Zombie Noun

A term often used in editing to describe a noun form of a verb or adjective that can make writing unnecessary complex or lifeless.

Purchasing Department

A division within a business that is responsible for acquiring goods and services necessary for the organization's operations.

RFP

An acronym for Request for Proposal, a document that solicits proposals, often through a bidding process, by an agency or company interested in procurement of a commodity, service, or valuable asset.

Conciseness

The quality of being brief and to the point, eliminating unnecessary words without sacrificing clarity.