Tuesday, November 12, 2019

Roy's Welding Supplies common stock sells for $38 a share and pays an annual dividend that increases by 3 percent

Roy's Welding Supplies common stock sells for $38 a share and pays an annual dividend that increases by 3 percent annually. The market rate of return on this stock is 8.20 percent. What is the amount of the last dividend paid? 
 
A. 
$1.80

B. 
$1.86

C. 
$1.92

D. 
$1.98

E. 
$2.10


 


71.
Douglass Gardens pays an annual dividend that is expected to increase by 3.6 percent per year. The stock commands a market rate of return of 12.6 percent and sells for $28.50 a share. What is the expected amount of the next dividend? 
 
A. 
$2.03

B. 
$2.57

C. 
$3.17

D. 
$2.20

E. 
$2.28


 


72.
Atlas Mines has adopted a policy of increasing the annual dividend on its common stock at a constant rate of 2.75 percent annually. The firm just paid an annual dividend of $1.67. What will the dividend be six years from now? 
 
A. 
$1.88

B. 
$1.92

C. 
$1.97

D. 
$2.02

E. 
$2.05
D6 = $1.67 × (1.0275)6 = $1.97

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