Which of the Following Statements Is Most Correct

question 28

Multiple Choice

Which of the following statements is most correct?

• A) Assume that the required rate of return on a given stock is 13 percent. If the stock's dividend is growing at a constant rate of 5 percent, its expected dividend yield is 5 percent as well.
• B) The dividend yield on a stock is equal to the expected return less the expected capital gain.
• C) A stock's dividend yield can never exceed the expected growth rate.
• D) All of the answers above are correct.
• E) Answers b and c are correct.

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Definitions:

Sales Price

The amount a customer pays to purchase a good or service.

Low-Volume Products

Products that are manufactured or sold in relatively small quantities compared to other products.

Cost Pool

A collection of indirect costs grouped together, typically for the purpose of allocating them to different products, services, or departments.

ABC

Activity-Based Costing; a method of assigning overhead and indirect costs to specific products or projects based on their use of activities.