8. The __________ rate of interest is the actual rate charged by the supplier an

Question

8. The __________ rate of interest is the actual rate charged by the supplier and paid by the demander of funds. A) nominal B) real C) risk-free D) inflationary 9. The common stock of Marc Company is selling for $32.84. Dividend paid last period was $2.94, share and has growth rate of 9.5%. If you purchase the common stock at the market price what is the expected rate of return? A. 9.0% B. 9.8% C. 19.3% D. 18.45% 10. Bill plans to fund his individual retirement account (IRA) with the maximum contribution of $2,000 at the end of each year for the next 20 years. If Bill can earn 12 percent on his contributions, how much will he have at the end of twentieth year? A) $19,292 B) $14,938 C) $40,000 D) $144,104

Explanation / Answer

Answer:8 A) Nominal

Answer:9 C) 19.30%

D1=2.94(1+0.095)=3.2193

Ke=(3.2193/32.84)+0.095

=19.30%

Answer:10 C) $40000

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