Suppose You Are Willing to Pay $30 Today for a Share

question 23

Multiple Choice

Suppose you are willing to pay $30 today for a share of stock which you expect to sell at the end of one year for $32.If you require an annual rate of return of 12 percent,what must be the amount of the annual dividend which you expect to receive at the end of Year 1?

• A) $2.25
• B) $1.00
• C) $1.60
• D) $3.00
• E) $1.95

Comprehend the concept of insider trading, its legal implications, and the associated roles of individuals.

Understand the various exemptions and defenses available under securities law.

Distinguish between different types of investors and their qualifications under securities regulations.

Appreciate the significance of cautionary statements in securities litigation and the protection they offer to issuers.

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Definitions:

Fraud

Intentional deception made for personal gain or to damage another individual.

Voidable Contract

A voidable contract is a legal agreement that may be annulled or declared invalid by one of the parties due to certain defects, while remaining valid until such action is taken.

Result

The outcome or consequence of an action, process, or situation, often measured to determine success or failure.

Contract

An accord among several parties that is legally obligatory and subject to legal enforcement.