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Given That Dividends on a Share Are Expected to Remain

Question 1

Multiple Choice

Given that dividends on a share are expected to remain indefinitely at $1 p.a.and that the required rate of return for the level of risk on such a share is 15%,the correct price for this share:


A) cannot be ascertained from this information.
B) cannot be ascertained without regard to the management structure of the firm.
C) is $1.
D) is $6.67.

Correct Answer:

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