Suppose You Are Willing to Pay $30 Today for a Share

question 23

Multiple Choice

Suppose you are willing to pay $30 today for a share of stock which you expect to sell at the end of one year for $32.If you require an annual rate of return of 12 percent,what must be the amount of the annual dividend which you expect to receive at the end of Year 1?

• A) $2.25
• B) $1.00
• C) $1.60
• D) $3.00
• E) $1.95

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Definitions:

Blocking

A method in experimental design to reduce variance by grouping experimental units with similar characteristics together and then randomly assigning treatments within these groups.

Average Prices

The mean value of a set of prices, calculated by adding all the prices together and dividing by the number of prices.

Supermarket Chains

Large retail organizations that own and operate multiple supermarket outlets, offering a wide range of food and household products.

Incentive

Something that motivates or encourages an individual or group to act or perform in a certain way.