NoGrowth Industries Presently Pays an Annual Dividend of $1

question 52

Multiple Choice

NoGrowth Industries presently pays an annual dividend of $1.20 per share and it is expected that these dividend payments will continue indefinitely. If NoGrowth's equity cost of capital is 10%, then the value of a share of NoGrowth's stock is closest to ________.

• A) $9.60
• B) $14.40
• C) $13.20
• D) $12.00