You Are Evaluating the Purchase of Holdings,Inc

question 44

Multiple Choice

You are evaluating the purchase of Holdings,Inc.common stock that just paid a dividend of $1.80,and the dividend will be $1.80 per share per year for the next ten years.You plan to hold the stock for three years and then sell it.You expect the price of the company's stock to rise to $51.50 at the end of your three-year holding period.You estimate that a required rate of return of 17.5% will be adequate compensation for this investment.Calculate the present value of the expected future stock price.Round to the nearest $.25.

• A)$64.00
• B)$55.25
• C)$31.75
• D)$103.00

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Definitions:

Autorhythmicity

The ability of certain cells, especially cardiac muscle cells, to generate a rhythmical impulse spontaneously.

Mitral Valve Prolapse

A condition in which the mitral valve of the heart does not close properly, sometimes causing blood to leak backward into the left atrium.

Left Atrium

The left atrium is the top left section of the heart, responsible for receiving blood rich in oxygen from the lungs and transferring it to the left ventricle.

Pulmonary Arteries

The pulmonary arteries are the vessels that carry deoxygenated blood from the right ventricle of the heart to the lungs for oxygenation.