Johnson Company Just Paid an Annual Dividend of $1

question 179

Multiple Choice

Johnson Company just paid an annual dividend of $1.75. The next dividend will be paid one year from today. Johnson Company expects a constant growth of 5 percent in dividends forever. The required rate of return for this company's common stock is 13 percent. What is the value of one share of common stock?

• A) $1.55
• B) $13.46
• C) $14.13
• D) $21.88
• E) $22.97

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Definitions:

Object Permanence

The realization that entities remain in existence even when they are out of sight, silent, or intangible.

Self-Awareness

The understanding by a person of their own character, feelings, desires, and drives.

Fetus

A developing human from roughly eight weeks after conception to birth.

Genome

The complete instructions for making an organism, consisting of all the genetic material in that organism’s chromosomes.