You Buy a Stock for $34 Per Share and Sell

question 13

Multiple Choice

You buy a stock for $34 per share and sell it for $36 after you collect a $1.00 per share dividend. Your pre-tax capital gain yield is ________________ and your pre-tax dividend yield is ________________.

• A) 2.94%; 2.78%
• B) 8.82%; 0.00%
• C) 5.88%; 2.94%
• D) 5.56%; 2.78%
• E) 4.65%; 3.17%

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Definitions:

Finished Goods Inventory

Items that have completed the manufacturing process and are ready to be sold to customers.

Specialized Electrical Switches

Electrical switches designed for specific functions or applications, often requiring custom designs or specifications to meet unique operational or safety standards.

Variable Costing

A pricing approach that incorporates solely the variable costs of production—such as direct materials, direct labor, and variable manufacturing overhead—into the cost per unit of products.

Variable Production Costs

Costs that vary directly with the level of production, such as raw materials and direct labor.