A company currently pays a dividend of $4.00 per share. It expects the growth rate of the dividend to be 3% (0.03) annually. If the interest rate is 6% (0.06) what does the dividend- discount model predict the current price of the stock should be?
A. $ 137.33
B. $103.33
C. $66.67
D. it doesn't, you need an expected future selling price to use the model.
Answer: A
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For firms that sell one product in a perfectly competitive market, marginal revenue is:
A. equal to market price. B. the additional revenue gained from selling one more unit. C. equal to average revenue. D. All of these are true.
Cooperative equilibriums:
A. can arise if a game is repeated. B. are impossible to reach in real life. C. never result in positive-positive outcomes. D. never occur unless players act in their own self-interest.
Which of the following examples would be least likely to happen in a rent-controlled apartment?
a. The repair of a tile floor would be delayed for months. b. The tenants would be reluctant to move. c. A new toilet would be installed. d. The walls would require repainting.
Tying contracts are illegal under the:
A. Wagner Act of 1935. B. Clayton Act of 1914. C. FTC Act of 1914. D. Celler-Kefauver Act of 1950.