A company currently pays an annual dividend of $6.50 per share. It expects the growth rate of the dividend will be 2.5% (0.025) annually. If the interest (discount) rate is 5% (0.05) what does the dividend-discount model predict the current price of the stock should be?
A. $257.50
B. $266.50
C. $130.00
D. It doesn't, you need an expected future price to use the model
Answer: B
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A decrease in the demand for dollars on the foreign exchange market, all else equal, will result in:
A) appreciation of the U.S. dollar and depreciation of the foreign currency.
B) appreciation of the U.S. dollar and appreciation of the foreign currency.
C) depreciation of the U.S. dollar and depreciation of the foreign currency.
D) depreciation of the U.S. dollar and appreciation of the foreign currency.
If average income increases, ceteris paribus, then there will be:
a. A movement along and a shift in the demand curve b. A shift of the demand curve. c. No effect on the demand curve, because income is not a ceteris paribus condition d. A movement along the demand curve
Developing countries do:
A. compete with one another for foreign investment, and this competition reduces the benefits from foreign investment. B. not compete with one another for foreign investment, because they have sufficient domestic saving to finance their investment needs. C. not compete with one another for foreign investment, because they lack the infrastructure to attract it in the first place. D. compete with one another for foreign investment, but this competition is beneficial to developing countries because it insures a more efficient allocation of resources.
Which statement is true?
A. Autonomous C plus induced C = C. B. Autonomous C less induced C = C. C. Induced C minus autonomous C = C. D. None of these statements are true.