Merrell Enterprises' Stock Has an Expected Return of 14

question 22

Multiple Choice

Merrell Enterprises' stock has an expected return of 14%. The stock's dividend is expected to grow at a constant rate of 8%, and it currently sells for $50 a share. Which of the following statements is CORRECT?

• A) the stock's dividend yield is 8%.
• B) the current dividend per share is $4.00.
• C) the stock price is expected to be $54 a share one year from now.
• D) the stock price is expected to be $57 a share one year from now.
• E) the stock's dividend yield is 7%.

---

Definitions:

Soft Drink

A non-alcoholic beverage, usually carbonated, flavored, and sweetened, such as soda, colas, or other flavored carbonated drinks.

Natural Gas

A fossil fuel composed mainly of methane, used as an energy source for heating, cooking, and electricity generation.

Electric Heat Pumps

Electric heat pumps are energy-efficient devices used for heating and cooling buildings, utilizing electricity to transfer heat from cooler spaces to warmer ones or vice versa.

Complementary Goods

Products or services that are typically used together, where the demand for one increases the demand for the other.