Which of the Following Values Is Closest to the Amount

question 43

Multiple Choice

Which of the following values is closest to the amount that should be paid for a stock that will pay a dividend of $10 one year from now and $11 two years from now? The stock will be sold in 2 years for an estimated price of $120. The appropriate discount rate is 9%.

• A) $114.
• B) $119.
• C) $124.
• D) $129.
• E) $138.

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Definitions:

Farmers

Individuals engaged in agricultural activities, aimed at producing food and other crops.

Fed

Short for the Federal Reserve System, it's the central banking system of the United States, responsible for monetary policy.

Government Bonds

Government bonds are debt securities issued by a government to support government spending and obligations, often considered low-risk investments.

Value of Money

The purchasing power of money, which can vary based on inflation or deflation, affecting how much goods and services can be bought.