A Stock Currently Sells for $63 Per Share, and the Required

question 70

Multiple Choice

A stock currently sells for $63 per share, and the required return on the stock is 10%. Assuming a growth rate of 5%, calculate the stock's last dividend paid.

• A) $1
• B) $3
• C) $5
• D) $7

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Definitions:

Book Value Per Share

A measure that represents the equity value of a company per outstanding share, calculated by dividing the company's net assets by the number of shares outstanding.

Stock Valuation Models

The methods and strategies used to estimate the true value of a company's stock.

Market Value

The current price at which an asset or service can be bought or sold in a public marketplace.

Stock Split

A corporate action to increase the number of outstanding shares by dividing each share, which typically reduces the share price.