You Expect a Share of EconNews

question 92

Multiple Choice

You expect a share of EconNews.Com to sell for $65 a year from now. If you are willing to pay $65.74 for one share of the stock today, and you require a return of 8 percent, what dividend payment must you expect to receive from the stock?

• A)$4.46
• B)$5.20
• C)$6.00
• D)$9.25

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Definitions:

Winner-Take-All Markets

Markets in which a small number of sellers or creators receive a large majority of the rewards, leaving little for others.

Substitution Effect

The economic principle that as the price of a good decreases, consumers will substitute away from higher-priced goods, and vice versa.

Trade-off

A situation that involves losing one quality or aspect of something in return for gaining another quality or aspect.

Wage Rate

The standard amount of pay given to workers per unit of time, often expressed per hour or year.