Benny Simpson Is Considering an Investment in Pontoon Industries Inc

question 7

Multiple Choice

Benny Simpson is considering an investment in Pontoon Industries Inc. He anticipates a dividend of $0.50 next year and an increase in the stock price from the current price of $18.25 per share to $20 per share. If he plans to hold the stock for one year, should Mr Simpson buy the stock if he requires an annual return of 12% on similar-risk investments?

• A) no, because his anticipated return of 2.74% is exceeded his required return of 12%
• B) no, because his anticipated return of 9.59% is exceeded his required return of 12%
• C) yes because his anticipated return of 12.33% exceeds his required return of 12%
• D) There is not enough information to answer this question.

---

Definitions:

Longitudinal Method

A research design in which the same participants are observed repeatedly over a period of time.

Biographical Approach

A method of study that involves analyzing a person's life story and experiences to understand their behaviors and mental states.

Longitudinal

Longitudinal refers to research or studies conducted over a long period of time, tracking the same individuals or subjects to observe changes and developments.

Cross-Sectional

Describes a study design that analyzes data from a population, or a representative subset, at a specific point in time.