Given That the Cost of Common Stock Is 9 Percent,dividends

question 46

Multiple Choice

Given that the cost of common stock is 9 percent,dividends are $0.75 per share and the price of the stock is $12.50 per share,what is the annual growth rate of dividends?

• A)2 percent
• B)4 percent
• C)3 percent
• D)5 percent

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Definitions:

Quick Ratio

A measure of a company's ability to meet its short-term obligations using its most liquid assets, calculated as (cash + marketable securities + accounts receivable) / current liabilities.

Current Ratio

This ratio assesses a firm's capacity to cover its obligations due in the next year by comparing its current assets to its current liabilities.

Interval Measure

A financial metric used to determine how long a company can operate with its available amount of current assets, calculated usually in months.

Time-Trend Analysis

A method of forecasting future data points by analyzing the patterns of historical data over time.