Fall 2017 (Version A) SEC 39. Which one of the following correctly describes the dividend yield? a. next year's annual dividend divided by today's stock price D. this year's annual dividend divided by today's stock price c. this year's annual dividend divided by next year's expected stock price d. next years annual dividend divided by this year's annual dividend e the increase in next year's dividend over this year's dividend divided by this year's dividend 40 Which of the following is NOT a capital component when calculating the weighted average cost of capital (WACC) for use in capital budgeting? a. Long-term debt. b. Accounts payable c. Retained earnings. d. Common stock. e. Preferred stock. 41. What is the beta of the following portfolio? Amount Stock Beta $6,700 $3,000 $8,500 070 1.41 1.23 a. 0.95 b. 1.01 c. 1.05 d. 1.09 e. 1.23 42. A stock has a required return of 11 percent, the risk-free rate is 5.2 percent, and the market risk premium is 5 percent. What is the stock's beta? a. 1.08 b. 1.16 c. 1.29 d. 1.32 e. 1.35