The S&P 500 Has a Dividend Yield of 2

question 36

Multiple Choice

The S&P 500 has a dividend yield of 2.4 percent.Analysts expect overall dividends to grow at a 5.2 percent annually.Treasury bills yield 3.2 percent.The expected market rate of return is ____ percent and the market risk premium is ____ percent.

• A)10.8;7.6
• B)4.4;1.2
• C)7.6;4.4
• D)10.8;4.4
• E)10.8;5.2

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Definitions:

Sales Volume

Refers to the total number of units sold within a given period.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Manufacturing Costs

The total cost related to the production of goods, including raw materials, labor, and overhead expenses.

Variable Costing

A costing method that includes only variable production costs - direct materials, direct labor, and variable manufacturing overhead - in the cost of a product.