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<!DOCTYPE html PUBLIC "-//ABISOURCE//DTD XHTML plus AWML 2.2//EN" "http://www.abisource.com/2004/xhtml-awml/xhtml-awml.mod"><html xmlns="http://www.w3.org/1999/xhtml" xmlns:awml="http://www.abisource.com/2004/xhtml-awml/"> <head> <meta http-equiv="Content-Type" content="application/xhtml+xml; charset=UTF-8" /> <title> Abiword HTML Document </title> </head> <body> <div> <table border="0" cellpadding="0" style="width:100%;border:1pt;border-collapse:collapse;empty-cells:show;table-layout:fixed;border-style:solid"> <tr> <td rowspan="" colspan="" style="padding: 0.00pt;border:inherit inherit #ffffff"> <p style="text-align:justify;margin-bottom:0.000000pt"> <span style="font-size:10pt;font-family:'Times New Roman';color:#000000">The common stock of Eddie's Engines, Inc. sells for $45.68 a share. The stock is expected to pay $4.10 per share next year. Eddie's has established a pattern of increasing their dividends by 6.2 percent annually and expects to continue doing so. What is the market rate of return on this stock?</span> </p> </td> </tr> </table> <p style="margin-bottom:0.000000pt"> <span style="font-size:10.5pt;font-family:'proxima_nova_regular';color:#333333">7.26 percent</span> </p> <p style="margin-bottom:0.000000pt"> <span style="font-size:10.5pt;font-family:'proxima_nova_regular';color:#333333">11.14 percent</span> </p> <p style="margin-bottom:0.000000pt"> <span style="font-size:10.5pt;font-family:'proxima_nova_regular';color:#333333">17.67 percent</span> </p> <p style="margin-bottom:0.000000pt"> <span style="font-size:10.5pt;font-family:'proxima_nova_regular';color:#333333">15.18 percent</span> </p> <p> <span style="font-size:10.5pt;font-family:'proxima_nova_regular';color:#333333">8.98 percent</span> </p> <p> </p> <table border="0" cellpadding="0" style="width:100%;border:1pt;border-collapse:collapse;empty-cells:show;table-layout:fixed;border-style:solid"> <tr> <td rowspan="" colspan="" style="padding: 0.00pt;border:inherit inherit #ffffff"> <p style="text-align:justify;margin-bottom:0.000000pt"> <span style="font-size:10pt;font-family:'Times New Roman';color:#000000">Weisbro and Sons common stock sells for $22 a share and pays an annual dividend that increases by 4.1 percent annually. The market rate of return on this stock is 9.80 percent. What is the amount of the last dividend paid by Weisbro and Sons?</span> </p> </td> </tr> </table> <p style="margin-bottom:0.000000pt"> <span style="font-size:10.5pt;font-family:'proxima_nova_regular';color:#333333">$1.31</span> </p> <p style="margin-bottom:0.000000pt"> <span style="font-size:10.5pt;font-family:'proxima_nova_regular';color:#333333">$1.20</span> </p> <p style="margin-bottom:0.000000pt"> <span style="font-size:10.5pt;font-family:'proxima_nova_regular';color:#333333">$2.07</span> </p> <p style="margin-bottom:0.000000pt"> <span style="font-size:10.5pt;font-family:'proxima_nova_regular';color:#333333">$0.87</span> </p> <p> <span style="font-size:10.5pt;font-family:'proxima_nova_regular';color:#333333">$1.16</span> </p> <p> </p> <table border="0" cellpadding="0" style="width:100%;border:1pt;border-collapse:collapse;empty-cells:show;table-layout:fixed;border-style:solid"> <tr> <td rowspan="" colspan="" style="padding: 0.00pt;border:inherit inherit #ffffff"> <p style="text-align:justify;margin-bottom:0.000000pt"> <span style="font-size:10pt;font-family:'Times New Roman';color:#000000">Leslie's Unique Clothing Stores offers a common stock that pays an annual dividend of $2.60 a share. The company has promised to maintain a constant dividend. How much are you willing to pay for one share of this stock if you want to earn a 13.80 percent return on your equity investments?</span> </p> </td> </tr> </table> <p style="margin-bottom:0.000000pt"> <span style="font-size:10.5pt;font-family:'proxima_nova_regular';color:#333333">$18.84</span> </p> <p style="margin-bottom:0.000000pt"> <span style="font-size:10.5pt;font-family:'proxima_nova_regular';color:#333333">$5.31</span> </p> <p style="margin-bottom:0.000000pt"> <span style="font-size:10.5pt;font-family:'proxima_nova_regular';color:#333333">$11.20</span> </p> <p style="margin-bottom:0.000000pt"> <span style="font-size:10.5pt;font-family:'proxima_nova_regular';color:#333333">$35.88</span> </p> <p> <span style="font-size:10.5pt;font-family:'proxima_nova_regular';color:#333333">$16.40</span> </p> <p> <a name="_GoBack"> </a> </p> </div> </body></html> ">
