The Expected Return on Natter Corporation's Stock Is 14

question 37

Multiple Choice

The expected return on Natter Corporation's stock is 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 7%.
• B) The stock's dividend yield is 8%.
• C) The current dividend per share is $4.00.
• D) The stock price is expected to be $54 a share one year from now.
• E) The stock price is expected to be $57 a share one year from now.

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Definitions:

Deductible

An amount of any loss that is to be paid by the insured.

Inflationary Times

Periods characterized by a general increase in prices and fall in the purchasing value of money.

Insurance Policies

Contracts between an insurer and a policyholder, outlining the terms under which the insurer agrees to pay a benefit upon the occurrence of a specified risk or event.

Bank Interest Rates

The percentage at which interest is paid by a borrower for the use of money that they borrow from a bank.