If a company pays a dividend of $5 to be received one year from now, dividends are expected to grow at a rate of 8 percent per year for the indefinite future, and the interest rate is 14 percent, the price of the company's stock should be ________
per share.
A) $8.00 B) $83.33 C) $227.27 D) $610.00
B
You might also like to view...
An argument against the benefits-received principle is the benefits the rich receive from government programs are available to everyone
Indicate whether the statement is true or false
________ is defined as any attempt to capture consumer surplus, producer surplus or economic profit
A) Search B) Rent seeking C) Maximizing monopoly profits D) Price discrimination
A central cause of the rising debt-GDP ratio in the United States during the 1980s and 1990s was
A) the tax cuts of the early 1980s. B) continuous increases in the military portion of the federal budget. C) overly-generous indexation of Social Security benefits. D) deficit-reduction targets.
If productivity increases as wages increase and firms pay a wage above the market clearing wage, then
A. these firms will go out of business in the long run because they will not be able to compete with firms paying lower wages. B. these firms will have lower profit levels than their competitors. C. these firms will face an excess demand for labor and will be able to hire the best workers in the market. D. a potential benefit these firms may receive is a reduction in employee turnover.