Determine the market rate of return

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Reference no: EM1350836

1. Next year's annual dividend divided by the current stock price is called the:
yield to maturity.
total yield.
dividend yield.
capital gains yield.
earnings yield.

2. Payments made by a corporation to its shareholders, in the form of either cash, stock or payments in kind, are called:
retained earnings.
net income.
dividends.
redistributions.
infused equity.

3. The discount rate in equity valuation is composed entirely of:
the dividends paid and the capital gains yield.
the dividend yield and the growth rate.
the dividends paid and the growth rate.
the capital gains earned and the growth rate.
the capital gains earned and the dividends paid.

4. Bet'R Bilt Bikes just announced that its annual dividend for this coming year will be $2.42 a share and that all future dividends are expected to increase by 2.5% annually. What is the market rate of return if this stock is currently selling for $22 a share?
9.5%
11.0%
12.5%
13.5%
15.0%

5. How much are you willing to pay for one share of stock if the company just paid an $.80 annual dividend, the dividends increase by 4% annually and you require an 8% rate of return?
$19.23
$20.00
$20.40
$20.80
$21.63

Reference no: EM1350836

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