If a Company Pays a Dividend of $2 to Be

question 127

Multiple Choice

If a company pays a dividend of $2 to be received one year from now,dividends are expected to grow at a rate of 3 percent per year for the indefinite future,and the interest rate is 4 percent,the price of the company's stock should be ________ per share.

• A)$3.40
• B)$28.57
• C)$200.00
• D)$340.00

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Definitions:

Integrity

The quality of being honest and having strong moral principles.

Positive Reinforcement

A method of encouraging desired behavior by offering rewards or positive outcomes in response to such behavior.

Delegating

The process of assigning responsibility and authority to someone else while retaining accountability for the outcome.

Group Development

The process through which a team progresses through various stages of cohesion, role establishment, and norm development to achieve effective collaboration and goal fulfillment.