Merrell Enterprises' stock has an expected return of 14%. The stock's dividend is expected to grow at a constant rate of 8%, and it currently sells for $50 a share. Which of the following statements is CORRECT?
A. The stock's dividend yield is 8%.
B. The current dividend per share is $4.00.
C. The stock price is expected to be $54 a share one year from now.
D. The stock price is expected to be $57 a share one year from now.
E. The stock's dividend yield is 7%.
Answer: C
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Nicholas Industries can issue a 20-year bond with a 6% annual coupon. This bond is not convertible, is not callable, and has no sinking fund. Alternatively, Nicholas could issue a 20-year bond that is convertible into common equity, may be called, and has a sinking fund. Which of the following most accurately describes the coupon rate that Nicholas would have to pay on the convertible, callable bond?
A. It could be less than, equal to, or greater than 6%. B. Greater than 6%. C. Exactly equal to 8%. D. Less than 6%. E. Exactly equal to 6%.
Audit objectives in the electronic data interchange (EDI) environment include all of the following except
a. all EDI transactions are authorized b. unauthorized trading partners cannot gain access to database records c. a complete audit trail of EDI transactions is maintained d. backup procedures are in place and functioning properly
If the three highest-level ethical theories are in conflict about what to do in a situation, what is considered to be the most important ethical choice?
a. trying to improve the lives of the majority of affected people b. pursuing the greatest good c. seeking to do the least amount of harm d. respecting everyone and acting virtuously
Safety stock levels for a periodic review model tend to be _________ when compared to a reorder point model.
a. Lower b. Higher c. Neither lower nor higher d. It is impossible to determine safety stock levels for a periodic review model