A Stock's Price Is $20 at the Beginning of a Year.There

question 28

Multiple Choice

A stock's price is $20 at the beginning of a year.There is a 25 percent chance that the price will be $17 at the end of the year, and a 75 percent chance that the price will be $25 at the end of the year.The stock will pay a dividend of $3 during the year.The expected return on the stock is _____percent.

• A)10
• B)20
• C)30
• D)40

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Definitions:

Salary Allowances

Employee benefits added to base salary, such as health insurance, bonuses, or retirement contributions.

Capital Balances

The amount of money that partners or shareholders have contributed to a business or the equity they have in a business.

Net Income

The total profit of a company after all expenses, including taxes and operational costs, have been deducted from total revenue.

Closing the Revenue

Closing the Revenue involves transferring the revenue earned during an accounting period to the capital account to prepare the company's books for the next period.