Asked by
K'yara Rayford
on Dec 09, 2024
Verified
Marty Corporation's next dividend and stock price are expected to be $3 and $15 respectively. If the investor's rate of return is 10%, determine the stock price now.
A) $15.87
B) $16.36
C) $16.94
D) $17.52
E) $18.06
Rate of Return
Over a predetermined period, the positive or negative change in an investment's value, displayed as a percentage of its initial cost.
Stock Price
The existing rate at which shares of a specific company are available for purchase or sale on the stock exchange.
Next Dividend
The upcoming payment declared by a company's board of directors to be distributed among shareholders.
- Figure out the present value of near-term dividends to evaluate the value of the stock.
- Distinguish between different rates of return and their implications on stock prices.
Verified Answer
LM
Learning Objectives
- Figure out the present value of near-term dividends to evaluate the value of the stock.
- Distinguish between different rates of return and their implications on stock prices.