On the Assumption That a Share of Stock Will Be

question 34

Multiple Choice

On the assumption that a share of stock will be held for two years and then sold, the formula for determining its current price is:

• A) P₀ = D₀[PVF_k,0]+D₁[PVF_k,1]+D₂[PVF_k,2]+P₂[PVF_k,2].
• B) P₀ = D₀[PVFA_k,0]+D₁[PVFA_k,1]+D₂[PVFA_k,2]+P₂[PVF_k,2].
• C) P₀ = D₁[PVF_k,1]+D₂[PVF_k,2]+P₂[PVF_k,2].
• D) P₀ = D₀[FVF_k,0]+D₁[FVF_k,1]+D₂[FVF_k,2]+P₂[FVF_k,2].

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Retained

The act of keeping or holding onto something, such as information in memory or employees in a company.

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