Ace Incorporated Has Just Paid a Dividend of $4

question 72

Multiple Choice

Ace Incorporated has just paid a dividend of $4.00 per share.They have a retention ratio of 20 percent.They have a P/E ratio of 14.What should be the current price of the stock?

• A) $56.00
• B) $11.20
• C) $70.00
• D) $46.67
• E) There is not enough information to answer this question.

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Definitions:

Equivalent Cost

The cost associated with producing an additional unit of output when costs are shared among products or services.