Merrell Enterprises' Stock Has an Expected Return of 14

question 17

Multiple Choice

Merrell Enterprises' stock has an expected return of 14%.The stock's dividend is expected to grow at a constant rate of 8%, and it currently sells for $50 a share.Which of the following statements is CORRECT?

• A) The stock's dividend yield is 8%.
• B) The current dividend per share is $4.00.
• C) The stock price is expected to be $54 a share one year from now.
• D) The stock price is expected to be $57 a share one year from now.
• E) The stock's dividend yield is 7%.

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Definitions:

Trace

A very small amount of something.

Natural Selection

The evolutionary process by which favorable traits become more common in successive generations of a population, influenced by environmental pressures.

Variations

Differences within populations, which can be genetic, phenotypic, or behavioral, contributing to the diversity of organisms.

Morphological Divergence

Evolutionary pattern in which a body part of an ancestor changes differently in its different descendants.