The Expected Rate of Return on the Common Stock of Northwest

question 49

Multiple Choice

The expected rate of return on the common stock of Northwest Corporation is 14 percent. The stock's dividend is expected to grow at a constant rate of 8 percent a year. The stock currently sells for $50 a share. Which of the following statements is most correct?

• A) The stock's dividend yield is 8 percent.
• B) The stock's dividend yield is 7 percent.
• C) The current dividend per share is $4.00.
• D) The stock price is expected to be $54 a share in one year.
• E) The stock price is expected to be $57 a share in one year.

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Definitions:

Sleep Paralysis

A temporary inability to move or speak while falling asleep or upon waking, often accompanied by hallucinations.

Sleep Apnea

A sleep disorder characterized by pauses in breathing or periods of shallow breathing during sleep.

Insomnia

A sleep disorder characterized by difficulty falling asleep, staying asleep, or experiencing restorative sleep, leading to daytime dysfunction.

Repression

A defense mechanism in psychoanalysis where distressing thoughts and memories are unconsciously blocked from conscious awareness.