Lake Co Has Paid a Dividend $3 Per Share Out of of Earnings

question 59

Multiple Choice

Lake Co. has paid a dividend $3 per share out of earnings of $5 per share. If the book value per share is $40, what is the expected growth rate in dividends?

• A) 7.5%
• B) 8%
• C) 12.5%
• D) 5%

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Definitions:

Carbon Dioxide

This gas, which has no color and no smell, is generated when carbon and organic substances burn and through the act of respiration. It is a natural component of the air and is utilized by plants for photosynthesis.

Sugar

A sweet-flavored substance derived from various plants, primarily sugar cane and sugar beet, consisting chiefly of sucrose, and used as a sweetener in food and drink.

Starches

Complex carbohydrates composed of numerous glucose units, serving as a vital energy store in many plants.

Pigment

A substance that selectively absorbs light of specific wavelengths.