Question 1
McLaughlin Inc.’s stock has a required rate of return of 11.8%, and it sells for $72.50 per share. McLaughlin’s dividend is expected to grow at a constant rate of 7.9% per year. What is the expected year-end dividend, D1?
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$2.83
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$3.15
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$3.39
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$3.62
Question 2
Most studies of stock market efficiency suggest that the stock market is highly efficient in the strong form. Based on these findings, which of the following statements is correct?
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Managers who have inside information that is not available to the public cannot consistently earn abnormal returns, i.e., returns that are higher than those predicted by the SML.
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The stock price for a company has been decreasing for the past 3 months. Based on this information, it must be true that the stock price will also decrease during the current month.
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Information you read on a financial website such as Yahoo Finance today can be used to select stocks that will consistently beat the market.
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Information disclosed in companies’ most recent annual reports can be used to consistently beat the market.
Many types of edible fungi are grown for the market.
Perceptual judgment task used in Asch’s conformity studies
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buffers commonly employed for biochemical studies
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