A Stock You Are Interested in Paid a Dividend of $1

question 85

Multiple Choice

A stock you are interested in paid a dividend of $1 per share last year.The anticipated growth rate in dividends and earnings is 25 percent for the next two years before settling down to a constant 5 percent growth rate.The discount rate is 12 percent.What is the current value of the stock?

• A)$15.38
• B)$20.50
• C)$21.05
• D)$22.27
• E)$26.14

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Definitions:

Factorial Design

An experimental design that allows researchers to study the effects of two or more independent variables simultaneously on a dependent variable.

Conditions

The specific circumstances or factors affecting the environment in which an experiment or study is conducted.

Interactions

In statistics and research, the effect that the combination of variables has on an outcome, which is different from the effect that any of the variables have individually.

Repeated Measures Design

An experimental design in which the same subjects are exposed to each condition or treatment, allowing for the comparison of different treatments on the same subjects.