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A Share of Stock Expected to Pay an Annual Dividend

Question 21

Multiple Choice

A share of stock expected to pay an annual dividend of $12 forever has a market price of __________ when the Treasury bond rate is 6.5% and the stock has a risk premium of 4.5%.


A) $109.09
B) $184.62
C) $266.67
D) $600

Correct Answer:

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