Multiple Choice
The Absolute Finance Company (AFC) earned $5 a share last year and paid a dividend of $2 per share. Next year, you expect AFC to earn $6 a share next year and continue its payout ratio. Assume that you expect to sell the stock for $45 a year from now. If you require a 13 percent return on this stock, how much would you be willing to pay for it?
A) $41.95
B) $43.21
C) $45.13
D) $46.72
E) $47.40
Correct Answer:
Verified
Correct Answer:
Verified
Q24: The dividend discount model (DDM) can be
Q25: USE THE INFORMATION BELOW FOR THE FOLLOWING
Q26: Given an optimistic economic and stock-market outlook
Q27: The most appropriate discount rate to use
Q28: Which of the following is correct?<br>A) if
Q30: Using the constant growth model, an increase
Q31: In dividend discount models (DDM) with supernormal
Q32: A high-quality balance sheet typically has<br>A) limited
Q33: Using the constant growth model, an increase
Q34: Operating margins are defined as Operating Profit/Sales