You Are Considering the Purchase of XYZ Company's Ordinary Shares

question 28

Multiple Choice

You are considering the purchase of XYZ Company's ordinary shares which will pay a $1.00 per share dividend one year from the date of purchase.The dividend is expected to grow at the rate of 4% per year.If the appropriate discount rate for this investment is 14%, what is the price of one share of this stock?

• A)$7.14
• B)$10.00
• C)$25.00
• D)$30.12

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Definitions:

Grained Sedimentary

Refers to sedimentary rocks characterized by the size of their grains, which indicates the conditions of their formation.

Deposits

Sediments, minerals, or other substances that have been accumulated or left behind, typically by water, wind, or ice.

Lake

A large body of water surrounded by land, not directly connected to the sea.

Limestone

A sedimentary rock composed predominantly of calcium carbonate, principally in the form of calcite, and which may include chert, dolomite, and fine-grained clastic sediment.