USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 84

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Rick Thompson is considering the following alternatives for investing in Davis Industries, which is now selling for $44 per share:

-Refer to Exhibit 14.2. Assuming no commissions or taxes, what is the annualized percentage gain if the stock is at $30 in four months and the stock was purchased?

• A) 9.54 percent loss
• B) 95.45 percent loss
• C) 0.9545 percent gain
• D) 95.45 percent gain
• E) 9.54 percent gain

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Definitions:

Congeneric Merger

A type of merger between companies in related industries or sectors, aimed at diversification or enhancing competitive strengths.

Horizontal Merger

A business consolidation that occurs between firms operating in the same industry, often as competitors.

Vertical Merger

A merger between two companies that operate at different stages of the production process for a specific finished product.

Tire Manufacturer

A company specialized in the production and sale of tires for various vehicles, including cars, trucks, and bicycles.