You Are Considering the Purchase of a Stock with a Current

question 53

Multiple Choice

You are considering the purchase of a stock with a current market price of $50.25 per share.It is expected to pay a dividend of $5.25 next year.Historically the stock has grown at 5%,and based on its risk,you desire to earn a 15% return.Which of the following is true?

• A)Buy the stock,since your estimated price is higher than the market price.
• B)Buy the stock,since your estimated price is lower than the market price.
• C)Do not buy the stock,since your estimated price is lower than the market price.
• D)Do not buy the stock,since your estimated price is higher than the market price.
• E)None of the above are true statements

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Definitions:

Classical Conditioning

A learning process that involves pairing a previously neutral stimulus with an unconditioned stimulus to elicit a conditioned response.

Phobias

An intense, irrational fear of specific objects, situations, or activities that poses little to no actual danger.

Exposure Therapy

A psychological treatment method that involves confronting feared or traumatic memories, objects, or situations directly to reduce their associated anxiety.

Obsessive-Compulsive Disorder

A psychiatric condition marked by persistent, intrusive thoughts (obsessions) and repetitive actions (compulsions).