Chapter 4 The Value of Common Stocks

If all earnings are paid out as dividends and the cost of capital is 10%, calculate the current price per share for the stock. A) $200 . B) $100 . C) $150 . D) $50 . Answer: B. Type: Medium. Page: 77. Response: EPS = DPS = 20/2 = $10 per share = Po = 10/0.1 = 100. 39. Which of the following statements regarding free cash flow is true? ................
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