A stock currently does not pay an annual dividenD) An investor expects this policy to remain in force. She believes, however, the stock of this company will sell for $110.00 per share four years from now. If she has an interest (discount) rate of 7% (0.07), the dividend discount model predicts the current price of this stock should be:
A. $83.92
B. you cannot apply the model to this example since it requires a dividend be offered.
C. $86.35
D. $82.00
Answer: A
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Which of the following will most likely occur under a system of clearly defined and enforced private property rights?
What will be an ideal response?
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Fill in the blank(s) with the appropriate word(s).
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A. Farmer Smith's corn farm B. Tino's Italian eatery, a local restaurant C. TCI Cablevision, a supplier of cable television services D. Northwest Electricity, a supplier of electricity in the Northwest U.S.