Mortgage Instruments Inc

question 1

Multiple Choice

Mortgage Instruments Inc. is expected to pay dividends of $1.03 next year. The company just paid dividends of $1. This growth rate is expected to continue. How much should be paid for Mortgage Instruments stock just after the dividend if the appropriate discount rate is 5%?

• A) $20.
• B) $21.
• C) $34.
• D) $52.

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Definitions:

Marginal Product

The increase in output that is produced by adding one more unit of a particular input while holding all other inputs constant.

Total Output

The complete amount of goods or services produced by an economy, sector, or organization over a certain period.

Least Skilled Worker

An employee who possesses the minimal skills required for a job, often receiving the lowest wages.

MP

Represents marginal productivity, which is the additional output derived from the use of one more unit of a variable input, holding all other inputs constant.