5. expected returns, dividends, and growth the constant growth valuation formula has dividends in the numerator. dividends are divided by the difference between the required return and dividend growth rate as follows: pˆ0 = d1(rs − gl) which of the following statements best describes how a change in a firm’s stock price would affect a stock’s capital gains yield? the capital gains yield on a stock that the investor already owns has an inverse relationship with the firm’s expected future stock price. the capital gains yield on a stock that the investor already owns has a direct relationship with the firm’s expected future stock price. walter utilities is a dividend-paying company and is expected to pay an annual dividend of $1.05 at the end of the year. its dividend is expected to grow at a constant rate of 6.00% per year. if walter’s stock currently trades for $25.00 per share, what is the expected rate of return? 6.04% 6.60% 6.29% 10.20% which of the following statements will always hold true? the constant growth valuation formula is not appropriate to use unless the company’s growth rate is expected to remain constant in the future. the constant growth valuation formula is not appropriate to use for zero growth stocks. it will never be appropriate for a rapidly growing startup company that pays no dividends at present—but is expected to pay dividends at some point in the future—to use the constant growth valuation formula.

He management's discussion and analysis (md& a) required in general purpose federal financial reporting is different than that required by gasb of state and local governments in that: a. it includes information about the agency's performance goals and results in addition to financial activities. b. it is outside the general purpose federal financial report and is optional, not required. c. it is a part of the basic financial statements and, as a result, it is audited along with the financial statements. d. there are no significant differences.

In microeconomics, the point at which supply and demand meet is called the blank price

Selected information about income statement accounts for the reed company is presented below (the company's fiscal year ends on december 31): 2018 2017sales $ 4,400,000 $ 3,500,000cost of goods sold 2,860,000 2,000,000administrative expenses 800,000 675,000selling expenses 360,000 312,000interest revenue 150,000 140,000interest expense 200,000 200,000loss on sale of assets of discontinued component 50,000 —on july 1, 2018, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by gaap. the assets of the component were sold on september 30, 2018, for $50,000 less than their book value. results of operations for the component (included in the above account balances) were as follows: 1/1/18-9/30/18 2017 sales $ 400,000 $ 500,000 cost of goods sold (290,000 ) (320,000 )administrative expenses (50,000 ) (40,000 )selling expenses (20,000 ) (30,000 )operating income before taxes $ 40,000 $ 110,000 in addition to the account balances above, several events occurred during 2018 that have not yet been reflected in the above accounts: a fire caused $50,000 in uninsured damages to the main office building. the fire was considered to be an infrequent but not unusual event. inventory that had cost $40,000 had become obsolete because a competitor introduced a better product. the inventory was sold as scrap for $5,000.income taxes have not yet been recorded. required: prepare a multiple-step income statement for the reed company for 2018, showing 2017 information in comparative format, including income taxes computed at 40% and eps disclosures assuming 300,000 shares of common stock. (amounts to be deducted should be indicated with a minus sign. round eps answers to 2 decimal places.)