Ocean Co Has Paid a Dividend $2 Per Share Out of of Earnings

question 42

Multiple Choice

Ocean Co. has paid a dividend $2 per share out of earnings of $4 per share. If the book value per share is $25, what is the expected growth rate in dividends (g) ?

• A) 16%
• B) 12%
• C) 8%
• D) 4%

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Definitions:

Qualified Opinion

An auditor's statement issued when they have reservations about aspects of the financial statements of a company.

Financial Statements

Documents that provide an overview of a company's financial condition, including balance sheets, income statements, and cash flow statements.

GAAP

Generally Accepted Accounting Principles; a set of accounting standards and practices used for financial reporting in the U.S.

True Locality Rule

A legal principle ensuring that a case is tried in the jurisdiction where the events in question occurred.