PV of Dividends: Cortez, Inc

question 86

Multiple Choice

PV of dividends: Cortez, Inc., is expecting to pay out a dividend of $2.50 next year. After that it expects its dividend to grow at 7 percent for the next four years. What is the present value of dividends over the next five-year period if the required rate of return is 10 percent?

• A) $10.76
• B) $9.80
• C) $11.88
• D) $11.50

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Definitions:

Behavioral Sciences

The study of human and animal behavior through observation and scientific research, aiming to understand, predict, and manage behavior.

Mental Health

A state of well-being in which an individual realizes their own abilities, can cope with the normal stresses of life, can work productively, and is able to make contributions to their community.

Human Capital Value

The economic value of a worker's experience and skills, including factors like education, training, intelligence, skills, health, and loyalty.

Exceptional Skills

Outstanding or superior abilities in a particular area or field, significantly surpassing the average.