Fred flintlock wants to earn a total of 10% on his investments. he recently purchased shares of abc stock at a price of $20 a share. the stock pays a $1 a year dividend. the price of abc stock needs to if fred is to achieve his 10% rate of return.

a. remain constant
b. decrease by 5%
c. increase by 5%
d. increase by 10%
e. increase by 15%

Option (C) is correct.

Explanation:

Return on the stock = (Dividend ÷ Investment) + (capital gain ÷ investment )

= (Dividend ÷ Investment) + (Final price of the stock - initial price of the stock) ÷ Investment

10 = (1 ÷ 20) × 100 + ((final price - 20) ÷ 20) × 100

10 = 5 + 5 × ( final price - 20)

Final price = 21

Therefore, the stock price should increase by [(21 - 20) ÷ 20] × 100

                                                                            = 5%

answernet income for 2017 will be greater if the inventory quantity declines;

answer///supply is elastic, and demand is inelastic;