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:

Broca's Area

A region in the frontal lobe of the left hemisphere of the brain that is involved in language processing, speech production, and comprehension.

Wernicke's Area

A region of the brain that is important for language development and comprehension.

Limbic System

is a complex system of nerves and networks in the brain, involved with instinct and mood. It controls basic emotions and drives.

Somatic Nervous System

A part of the peripheral nervous system that controls voluntary movements of the body through the innervation of skeletal muscles and mediates sensory information.