Answer:
c. $19.11.
Explanation:
The Felix Corp current stock value will be determined by using formula:
D1 / (1 + r) ^ 1 + D2 / (1 + r) ^ 2 + D3 / (1 + r) ^ 3 + D4 / (1 + r) ^ 3
It has paid dividend of $1.00 which will grow at 12% per year for 2 years and at 4% indefinitely after 2 years.
D1 = $1.00
D2 = $1.00 * 1.12 = $1.12
D3 = $1.12 * 1.12 = $1.25
D4 = ( $1.25 * 1.04 ) / (0.10 - 0.04) = $21.67
Using formula the stock value will be:
$1.00 / 1.10 + $1.12 / (1.10)2 + $1.25 / (1.10)3 + $21.67 / (1.10)3
Current stock value = $19.11.
Answer:
that this antipoverty program costs the government more money.
Explanation:
The criticism would be that the that this antipoverty program costs the government more money. If the government should phase its support to anti poverty payments more slowly, the criticism would be that the programs costs more money.
Therefore this option is the right answer