Question
1. Mark owns a stock with a market price of $53 per share. This stock pays a constant annual dividend of $1.64 a share. If
1. Mark owns a stock with a market price of $53 per share. This stock pays a constant annual dividend of $1.64 a share. If the price of the stock suddenly falls to $41 a share, you would expect the: I. dividend yield to increase. II. dividend yield to decrease. III. growth rate to increase. IV. growth rate to decrease.
a) II only
b) I and III only
c) II and IV only
d) III only
e) I only
2. The 1800Flowers.com pays a constant annual dividend of $1.40 a share and currently sells for $15.00 a share. What is the rate of return?
a) 11.60 percent
b) 9.33 percent
c) 10.40 percent
d) 4.64 percent
e) 3.87 percent
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