The Common Stock of Auto Deliveries Sells for $28

question 83

Multiple Choice

The common stock of Auto Deliveries sells for $28.16 a share.The stock is expected to pay $1.35 per share next year when the annual dividend is distributed.The firm has established a pattern of increasing its dividends by 3 percent annually and expects to continue doing so.What is the market rate of return on this stock?

• A)7.42 percent
• B)7.79 percent
• C)19.67 percent
• D)20.14 percent
• E)20.86 percent

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Definitions:

Extra-low Range

A gear setting in vehicles offering significantly reduced speed and increased torque for challenging terrain or heavy loads.

Solenoid Coil

An electromagnetic coil used to convert electrical energy into linear motion, often used in valves or as actuating mechanisms.

Operating Variables

Factors that can be adjusted or varied during the operation of a machine, system, or process, affecting its performance or outcome.

Fast Adaptive Mode

High-speed processing algorithms; Allison uses this term to describe an operating condition in which large changes are made to initial shift conditions to adjust for major system tolerances such as solenoid-to-solenoid, main pressure, and clutch-to-clutch variations. A new or newly rebuilt transmission should be programmed to operate in fast adaptive mode.