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A Common Stock Pays an Annual Dividend Per Share of $1.80

Question 93

Multiple Choice

A common stock pays an annual dividend per share of $1.80. The risk-free rate is 5%, and the risk premium for this stock is 4%. If the annual dividend is expected to remain at $1.80 per share, what is the value of the stock?


A) $17.78
B) $20
C) $40
D) none of these options

Correct Answer:

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