Turnips and Parsley Common Stock Sells for $39

question 44

Multiple Choice

Turnips and Parsley common stock sells for $39.86 a share at a market rate of return of 9.5%. The company just paid its annual dividend of $1.20. What is the rate of growth of its dividend?

• A) 5.2%
• B) 5.5%
• C) 5.9%
• D) 6.0%
• E) 6.3%

---

Definitions:

Double Value

A term indicating that an item’s or asset's value has increased to twice its original value.

Compounded Quarterly

Interest calculation method where the interest earned is calculated and added to the principal four times a year.

Monthly Compounded

Interest calculation method where interest is added to the principal sum of a loan or deposit each month, leading to interest on interest.

Monthly Compounding

Calculation of interest on the principal sum plus any previously earned interest on a monthly basis.