Reference no: EM132995641

Problem 1) Stock is all of the following except (select the best choice below):

a) a seasoned issue

b) a security that may be purchased on margin

c) representative of an equity interest in a company

d) a security traded on both the primary and secondary markets

Problem 2) Vandalay Industries paid $2.00 per share in dividends yesterday. Its dividends are expected to grow steadily at 7% per year. What are dividends expected to be for each of the next 3 years? Round your answers to the nearest cent.

The year 1 dividend (D1) is $____________

The year 2 dividend (D2) is $____________

The year 3 dividend (D3) is $_____________

Problem 3) Company Z is currently priced at $41. They just reported earnings per share of $1.46. What is the P/E ratio that investors are willing to pay for a share of Company Z's stock?

a) 28

b) 25

c) 26

d) 30