-Why Did Cigarette Companies in the 1880s Decide to Start

question 32

Multiple Choice

-Why did cigarette companies in the 1880s decide to start issuing baseball cards featuring high-paid celebrities like Mike "King" Kelly to endorse their products?

• A) Kelly's scandalous off-field behavior including his alcoholism made him a public favorite.
• B) Kelly's athleticism and refined bearing made him the ideal man to legitimize tobacco use.
• C) Kelly thought this type of advertisement would launch his baseball career.
• D) Kelly's portrayal on baseball cards would offset ministers' anger for playing on Sundays.

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Definitions:

Perpetual Preferred Stock

A type of preferred stock with no fixed maturity date, where dividends must be paid by the company before dividends are paid to common stockholders.

Expected Return

The weighted average of all possible returns for an investment, with weights representing the probabilities of each outcome.

Required Return

The minimum gain investors expect from an investment, considering its risk level; synonymous with required rate of return.

Dividend Growth Rate

The annual rate at which the dividends paid by a stock is expected to grow.