10) "1You are considering purchasing one of two stocks. Stock A paid a dividend last year of $2.20 and has a growth rate of 7%. Stock B paid a dividend of .60 and has a growth rate of 11%. Stock A?s price is $20 and the stock B?s price is $10. Which statement is true (Use four decimals to make a decision, such as 6.05% or .0605.)"

a)Stock B is the better investment because its return is higher b)Stock A and Stock have approximately the same return c)Stock A is the better investment because its return is higher

11) You are considering purchasing one of two stocks. Stock? Slow Growth? had a dividend last year of $4.00 and a growth rate of 3%. Stock? High Growth? had a dividend of .50 and a growth rate is 12%. Stock Slow's price is $24.23 and stock High's price is $7.00. Which statement is true? (Use 4 decimal places.)

a)Stock? Slow Growth? is the better investment because its return is higher b)Stock? High Growth? is the better investment because its return is higher c)You should be indifferent because they have approximately the same return

12) Small Steaks announces sales for the quarter are less than previously expected. What will happen to the price of Small Steaks?

a)Rise b)fall c)stay the same d)vary a lot

13) Sometimes the price of a stock drops when the company's management announces an earnings increase. Which explanation is most often correct for the drop in stock price?

a)because management is thought to be lying because b)the market expected a larger increase c)most companies go bankrupt after such an announcement d)because dividends will also increase