The Common Stock of J

question 254

Multiple Choice

The common stock of J. K. Laminates sells for $32.60 a share. The stock is expected to pay $2.10 per share next month when the annual dividend is distributed. J. K.'s has established a pattern of
Increasing its dividends by 3.5% annually and expects to continue doing so. What is the market rate
Of return on this stock?

• A) 6.44%
• B) 6.67%
• C) 7.03%
• D) 9.94%
• E) 10.29%

---

Definitions:

Purchaser

An individual or entity that buys goods or services.

Quality of Goods

The degree to which goods meet the specified or implied criteria, often assessed in terms of durability, reliability, and performance.

Holder in Due Course

A party that has acquired a negotiable instrument in good faith and for value, and thus has certain protections against defenses and claims that could be asserted against the original payee.

Negotiable Instrument

A written document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payer named on the document.