A Stock Is Expected to Pay $2

question 64

Multiple Choice

A stock is expected to pay $2.60 per share every year indefinitely and the equity cost of capital for the company is 11%. What price would an investor be expected to pay per share next year?

• A) $5.91
• B) $11.82
• C) $17.73
• D) $23.64

---

Definitions:

Textiles

Materials made from fibers, threads, or yarns, designed for use in fabric production, including clothing, household items, and industrial goods.

Dairy Industry

A sector of agriculture involved in the production, processing, and distribution of milk and milk products.

Trade Ideas

The exchange of trading theories, strategies, or advice between individuals or entities, often to improve investment and economic outcomes.

Investment Capital

Funds allocated by individuals or institutions toward start-ups, business expansions, or other projects expected to yield profit.