Constant Growth: You Are Interested in Investing in a Company

question 79

Multiple Choice

Constant growth: You are interested in investing in a company that expects to grow steadily at an annual rate of 6 percent for the foreseeable future. The company paid a dividend of $2.30 last year. If your required rate of return is 10 percent, what is the most you would be willing to pay for this share? (Round to the nearest dollar.)

• A) $58
• B) $61
• C) $23
• D) $24

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Definitions:

Acute Stress Disorder

A mental health condition involving symptoms of anxiety and dissociation that occur within a month after exposure to a traumatic event.

External Locus

of control is a belief that outcomes in one’s life are determined by external forces beyond personal control.

Catastrophic Stress

Severe stress resulting from exposure to a traumatic event or disaster that overwhelms an individual’s ability to cope.

Post-traumatic Stress Disorder (PTSD)

A mental health condition triggered by experiencing or witnessing a severely traumatic event, characterized by flashbacks, nightmares, severe anxiety, and uncontrollable thoughts about the event.