An Issue of Ordinary Shares Currently Sells for $50

question 68

Multiple Choice

An issue of ordinary shares currently sells for $50.00 per share,has an expected dividend to be paid at the end of the year of $2.50 per share,and has an expected growth rate to infinity of 5% per year.If investors' required rate of return for this particular security is 12% per year,then this security is

• A)overvalued and offering an expected return higher than the required return.
• B)undervalued and offering an expected return higher than the required return.
• C)overvalued and offering an expected return lower than the required return.
• D)undervalued and offering an expected return lower than the required return.

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Definitions:

Employee Motivation

The combination of internal and external factors that stimulate workers to take actions that lead to achieving work-related goals.

Managerial Tasks

The responsibilities and activities undertaken by managers, including planning, organizing, leading, and controlling, to achieve organizational objectives.

Productive Organizations

Organizations that efficiently and effectively use resources to meet their goals and generate outputs that are valued in the market.

Team Building

The process of enhancing the cohesion and functionality of a team through various activities and exercises.