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Sales Company Paid a $1

Question 12

Multiple Choice

Sales Company paid a $1.00 dividend per share last year and is expected to continue to pay out 40% of earnings as dividends for the foreseeable future.If the firm is expected to generate a 10% return on equity in the future,and if you require a 12% return on the stock,the value of the stock is ________.


A) $17.67
B) $13.00
C) $16.67
D) $18.67
E) none of the above

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