An Investor Is Contemplating the Purchase of Ordinary Shares at the Beginning

question 100

Multiple Choice

An investor is contemplating the purchase of ordinary shares at the beginning of this year and to hold the shares for one year.The investor expects the year-end dividend to be $2.00 and expects a year-end price for the share of $40.If this investor's required rate of return is 10%,then the value of the share to this investor is

• A)$36.36.
• B)$38.18.
• C)$33.06.
• D)$34.88.

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Definitions:

Flexible Budget

A flexible budget adjusts costs and revenue levels according to varying activity levels, providing a more accurate performance assessment than a static budget.

Homeless

Individuals or families lacking a fixed, regular, and adequate nighttime residence.

Cost Formulas

Mathematical equations or models used to calculate the total cost of producing goods or services based on variable and fixed costs.

Activity Variances

Differences between planned activity levels and actual activity levels, used to measure the efficiency and performance of different business operations.