The Busby Corporation Had a Share Price at the Start

question 15

Multiple Choice

The Busby Corporation had a share price at the start of the year of $26.10, paid a dividend of $0.59 at the end of the year, and had a share price of $29.50 at the end of the year. Which of the following is closest to the rate of return of investments in companies with equal risk to The Busby Corporation for this period?

• A) 14%
• B) 13%
• C) 12%
• D) 15%

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Definitions:

Differential Costs

The difference in cost between two alternative decisions or changes in levels of operation.

Variable

An element that can change or vary, often used in mathematical modeling, programming, and statistical analysis to represent changeable data.

Committed Fixed Costs

Long-term fixed costs that cannot be easily altered in the short term, such as leases, insurance, and salaries for permanent staff.

Planning Horizon

The period into the future for which a company or individual makes plans and decisions, considering both short-term and long-term objectives.