A Share of Common Stock Has Just Paid a Dividend

question 24

Multiple Choice

A share of common stock has just paid a dividend of $2.00. If the expected long-run growth rate for this stock is 15 percent, and if investors require a 19 percent rate of return, what is the price of the stock?

• A) $57.50
• B) $62.25
• C) $71.86
• D) $64.00
• E) $44.92

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Definitions:

Openly Debate

The process of freely and respectfully discussing and arguing different viewpoints or opinions on a particular issue.

Rank Order

The arrangement or sequencing of items according to their importance, size, value, or any criterion that establishes a hierarchy or priority.

Electronic Brainstorming

A facilitated brainstorming process conducted over electronic platforms to generate ideas from participants in different locations.

Evaluation Apprehension

The fear of being judged by others, which can influence behavior and performance in social and evaluative situations.