The Current Yield on Zeta's Common Stock Is 5

question 383

Multiple Choice

The current yield on Zeta's common stock is 5.6%. The company pays a constant dividend of $1.80. What is the required rate of return on Zeta's stock?

• A) 3.80%
• B) 5.60%
• C) 5.88%
• D) 7.40%
• E) 7.65%

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Definitions:

Dissonance Theory

A psychological theory proposing that inconsistency among beliefs, perceptions, and actions leads to discomfort, which people are motivated to reduce.

Attitude

A fairly stable evaluation of something as good or bad that makes a person think, feel, or behave positively or negatively about some person, group, or social issue.

Abortion

The medical or surgical termination of a pregnancy before the fetus is capable of independent life.

Peripheral Route

One of the two paths of persuasion according to the Elaboration Likelihood Model, where people are influenced by superficial cues rather than detailed message content.