PV of Dividends: MineCast Has Not Paid Out Any Dividend

question 38

Multiple Choice

PV of dividends: MineCast has not paid out any dividend in the last three years. It does not expect to pay dividends in the next two years either as it recovers from an economic slowdown. Three years from now it expects to pay a dividend of $2.50 and then $3.00 in the following two years. What is the present value of the dividends to be received over the next five years if the discount rate is 15 percent?

• A) $4.85
• B) $5.37
• C) $5.50
• D) $6.14

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Definitions:

Phosphate Group

An important chemical group consisting of a phosphorus atom bonded to four oxygen atoms, involved in energy transfer and storage within cells through compounds like ATP.

DNA Polymerase

An enzyme that synthesizes DNA molecules from deoxyribonucleotides, the building blocks of DNA.

Sex Chromosomes

Pair of chromosomes that differs between males and females, and the difference determines sex.

Climate Change

Long-term alteration in average weather patterns, potentially due to natural phenomena or human activities.