Last Year Sample Corp

question 68

Multiple Choice

Last year Sample Corp.had earnings of $3 a share based upon a common share book value of $25 per share.If Sample paid a dividend of $1.50 last year then estimate Sample's growth rate.

• A) 6%
• B) 12%
• C) 50%
• D) none of the above

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Definitions:

Market Rate

The prevailing interest rate available in the marketplace for securities or loans, dictated by supply and demand forces.

Simple Interest

Interest earned or paid only on the original principal amount invested or loaned.

Prime Rate

The interest rate that commercial banks charge their most creditworthy customers, usually large corporations.

Repayment Schedule

A detailed plan of the amounts and timing of payments to be made on a loan.