A Stock Is Currently Selling for $28 a Share and Has

question 50

Multiple Choice

A stock is currently selling for $28 a share and has a dividend yield of 3.2 percent.The risk-free rate is 2.5 percent.What is the 6-month futures price on this stock?

• A) $27.66
• B) $27.90
• C) $28.02
• D) $28.10
• E) $28.35

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Definitions:

Weighted-Average Method

An inventory valuation method that assigns the average cost of all similar items in the inventory to the cost of goods sold and ending inventory.

Direct Labor Cost

The total expense of paying employees who directly manufacture or produce goods, excluding indirect labor like maintenance personnel.

Equivalent Units

A concept used in the cost accounting process that expresses the amount of work in process and finished units as a total of equivalent complete units.

Cost Per Equivalent Unit

A calculation used in process costing that assigns a cost to partially completed units, making them equivalent to fully completed units for inventory valuation.