If the required rate of return is 10 percent and the
Stock pays a fixed $5 dividend, its value is

Name: If the required rate of return is 10 percent and the Stock pays a fixed $5 dividend, its value is
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Question

Quizplus · Accepted Answer

The formula to calculate the value of a stock is Dividend/Required Rate of Return. 
In this case, the dividend is $5 and the required rate of return is 10 percent (or 0.10 as a decimal). 
So, the value of the stock is $5/0.10 = $50. 
Therefore, the correct choice is C.

If the Required Rate of Return Is 10 Percent and the