Bavarian Sausage Is Expected to Pay a $1

question 37

Multiple Choice

Bavarian Sausage is expected to pay a $1.57 dividend next year.If the required return on the stock investment is 14%,and the stock currently sells for $34.37,what is the implied dividend growth rate for this company?

• A) 6.37%
• B) 9.43%
• C) 12.68%
• D) 15.76%

---

Definitions:

Negotiable Instruments

Financial documents that guarantee the payment of a specific amount of money, either on demand or at a set time, with the payee able to transfer it to another holder.

Non Est Factum

A legal defense meaning "it is not my deed" used when a person signed a document mistakenly or under a fundamental misunderstanding.

Foreclosure

A legal process by which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments by forcing the sale of the asset used as the collateral for the loan.

Mortgage

A legal agreement by which a bank or creditor lends money at interest in exchange for taking title of the debtor's property, with the condition that the conveyance of title becomes void upon the payment of the debt.