Author Question: Leonardo's broker called him recently with an offer to buy Downliner Waterproof Furnishings Corp ... (Read 61 times)

james · **on:** Jul 10, 2018

Leonardo's broker called him recently with an offer to buy Downliner Waterproof Furnishings Corp common stock for 40 per share. His broker promised to repurchase the shares in one year for 45 per share.

If Leonardo accepts this deal, what is his required return? The stock is not expected to pay a dividend next year.
A) 15.3
B) 10.0
C) 30.6
D) 15.1
E) 12.5

Question 2

Because poor creditworthy customers may cause bad debt losses, credit sales to them should not be
allowed.

Indicate whether the statement is true or false