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Seven-Seas Co

Question 18

Multiple Choice

Seven-Seas Co. has paid a dividend $3 per share out of earnings of $5 per share. If the book value per share is $40 and the market price is 52.50 per share, calculate the required rate of return on the stock.


A) 12%
B) 11%
C) 5%
D) 6%

Correct Answer:

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