A Stock Pays a Constant Annual Dividend and Sells for $56.10

question 59

Multiple Choice

A stock pays a constant annual dividend and sells for $56.10 a share.If the market rate of return on this stock is 12.5 percent,what is the amount of the next annual dividend?

• A)$5.67
• B)$5.94
• C)$6.21
• D)$6.84
• E)$7.30

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Definitions:

Equity

Refers to fairness or justice in the way people are treated or in the distribution of resources; in a financial context, it represents ownership interest in an asset or company.

Decree

A formal and authoritative order, often used in a legal context, such as a court decision or judgement.

Essential Functions

Fundamental job duties or activities that must be performed to achieve the objectives of a specific position.

Law

A system of rules that are created and enforced through social or governmental institutions to regulate behavior.