The Current Price of Stock Y Is $12

question 2

Multiple Choice

The current price of Stock Y is $12.It is expected that the stock will pay an annual dividend of $0.60 and sell for $13.50 in one year.The risk-free rate is 6%.The expected return on the market portfolio is 14% with a standard deviation of 17%.Assume the market is in equilibrium.What is current rate of return on Stock Y?

• A)6.50%
• B)8.00%
• C)12.50%
• D)17.50%

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Definitions:

Concurrent Engineering

A systematic approach to integrated product development that emphasizes the parallelisation of tasks and early consideration of every aspect of the product life cycle.

Product Design

The process of creating and developing new products, focusing on specifications, functionality, aesthetics, and usability.

Speedier Development

The practice of accelerating the creation and implementation process of projects or products to reduce time to market.

House of Quality

A matrix used in quality function deployment that visually relates customer desires to the means of achieving those desires, highlighting the relationships between customer requirements and product capabilities.