Kayla Would Like to Purchase a Stock Priced at $30

question 44

Multiple Choice

Kayla would like to purchase a stock priced at $30. The stock is not expected to pay any dividends in the coming year. She thinks she can sell the stock for $36 after one year. Her estimated return on the stock would be ____ percent.

• A)6
• B)10
• C)15
• D)20

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Definitions:

Allowance for Doubtful Accounts

An accounting provision that represents a company's estimate of invoices that will not be paid by customers.

Aging of Accounts Receivable

A method of categorizing accounts receivable based on how long they have been outstanding.

Percentage of Sales Basis

A forecasting method where certain expenses or accounts are based on a predetermined percentage of sales.

Bad Debt Expense

The cost associated with accounts receivable that a company does not expect to collect.