Chapter 7 Test 1. The common stock of Green Garden Flowers is selling for $24 a share. The company pays a constant annual dividend and has a total return of 3.8 percent. What is the amount of the dividend? a. $0.38 b. $0.76 c. $0.91 d. $1.38 e. $1.54 Answer: _____ 2. The Printing Company stock is selling for $32.60 a share based on a 14 percent rate of return. What is the amount of the next annual dividend if the dividends are increasing by 2.5 percent annually? a. $3.48 b. $3.52 c. $3.57 d. $3.66 e. $3.75 Answer: _____ 3. The common stock of Mid-Towne Movers is selling for $33 a share and has a 9 percent rate of return. The growth rate of the dividends is 1 percent annually. What is the amount of the next annual dividend? a. $2.58 b. $2.61 c. $2.64 d. $2.67 e. $2.70 Answer: _____ 4. Delphin’s Marina is expected to pay an annual dividend of $0.58 next year. The stock is selling for $8.53 a share and has a total return of 12 percent. What is the dividend growth rate? a. 3.82 percent b. 4.03 percent c. 4.28 percent d. 5.20 percent e. 5.49 percent Answer: _____ 5. Klaus Toys just paid its annual dividend of $1.40. The required return is 16 percent and the dividend growth rate is 2 percent. What is the expected value of this stock five years from now? a. $11.04 b. $11.26 c. $11.67 d. $12.41 e. $12.58 Answer: _____ 6. Blackwell Ink is losing significant market share and thus its managers have decided to decrease the firm’s annual dividend. The last annual dividend was $0.90 a share but all future dividends will be decreased by 5 percent annually. What is a share of this stock worth today at a required return of 15 percent? a. $4.07 b. $4.28 c. $4.49 d. $4.72 e. $4.95 Answer: _____ 7. The common stock of Tasty Treats is valued at $10.80 a share. The company increases its dividend by 8 percent annually and expects its next dividend to be $0.20 per share. What is the total rate of return on this stock? a. 8.64 percent b. 9.12 percent c. 9.40 percent d. 9.85 percent e. 10.64 percent Answer: _____ 8. River Rock, Inc. just paid an annual dividend of $2.80. The company has increased its dividend by 2.5 percent a year for the past ten years and expects to continue doing so. What will a share of this stock be worth six years from now if the required return is 16 percent? a. $23.60 b. $24.65 c. $25.08 d. $25.50 e. $26.90 Answer: _____ 9. A stock has a market price of $46.10 and pays a $2.40 annual dividend. What is the dividend yield? a. 4.13 percent b. 4.84 percent c. 5.21 percent d. 5.52 percent e. 5.78 percent Answer: _____ 10. The required return on Mountain Meadow stock is 14 percent and the dividend growth rate is 3.5 percent. The stock is currently selling for $11.80 a share. What is the dividend yield? a. 7.50 percent b. 8.00 percent c. 9.75 percent d. 10.50 percent e. 12.50 percent Answer: _____ 11. The Toy Box pays an annual dividend of $2.40 per share and sells for $46.60 a share based on a market rate of return of 15 percent. What is the capital gains yield? a. 7.35 percent b. 7.78 percent c. 9.23 percent d. 9.85 percent e. 10.11 percent Answer: _____ 12. Western Beef stock is valued at $62.10 a share. The company pays a constant annual dividend of $4.40 per share. What is the total return on this stock? a. 6.62 percent b. 6.81 percent c. 7.09 percent d. 7.49 percent e. 7.82 percent Answer: _____ 13. A preferred stock sells for $48.20 a share and has a market return of 15.65 percent. What is the dividend amount? a. $6.93 b. $6.80 c. $7.25 d. $7.42 e. $7.54 Answer: _____

The price is based on these factors:

Academic level

Number of pages

Urgency

Basic features

- Free title page and bibliography
- Unlimited revisions
- Plagiarism-free guarantee
- Money-back guarantee
- 24/7 support

On-demand options

- Writer’s samples
- Part-by-part delivery
- Overnight delivery
- Copies of used sources
- Expert Proofreading

Paper format

- 275 words per page
- 12 pt Arial/Times New Roman
- Double line spacing
- Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Delivering a high-quality product at a reasonable price is not enough anymore.

That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more