Use the Information for the Question(s)below

question 27

Multiple Choice

Use the information for the question(s) below.
Von Bora Corporation is expected to pay a dividend of $1.40 per share at the end of this year and a $1.50 per share at the end of the second year.You expect Von Bora's stock price to be $25.00 at the end of two years.Von Bora's equity cost of capital is 10%.
-Suppose you plan on purchasing Von Bora stock in one year,right after the $1.40 dividend is paid.You then plan on selling your stock at the end of year two,right after the $1.50 dividend is paid.The dividend yield that you will receive on your investment is closest to:

• A)5.75%.
• B)6.50%.
• C)6.25%.
• D)4.00%.

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Definitions:

Stanley Prusiner

A Nobel Prize-winning scientist known for his discovery of prions, a type of protein that can cause infectious diseases in the brain.

Biological Principle

Fundamental concepts that underpin the study of biology, such as the cell theory, gene theory, evolution, homeostasis, and ecology.

Prions

Infectious agents composed solely of protein, which can cause rare but fatal neurodegenerative diseases by inducing abnormal folding of specific proteins in the brain.

Measles Virus

A highly contagious virus that causes measles, a disease marked by fever, cough, and rash.