Castle, Inc paid a dividend yesterday of 2 per share. Castle management expects the dividend to
increase next year to 3 annually.
If the dividend is expected to stay at 3 per year for the
foreseeable future, what is the value of the stock to an investor with a required rate of return of
10?
A) 32.00 B) 50.00 C) 7.50 D) 30.00
Question 2
Depreciation is a non-cash deduction so it may be ignored in the calculation of a project's
incremental after-tax cash flows.
Indicate whether the statement is true or false