Donalds trumpets on average pays 85 percent interest on its


1. Donald's Trumpets on average pays 8.5 percent interest on its loans. This interest rate is referred to as the company's:

Capital gains yield.

Cost of debt.

Cost of capital.

Compound rate.

2. Brandon wants to use the dividend growth model to value the common stock of Micro Bus Inc. Helena reminds Brandon that he can't use the model if the company:

Has a retention ratio of 100 percent.

Pays a constant dividend year after year.

Pays an increasing dividend.

Has a dividend payout ratio of 100 percent.

Increases its dividend on a regular basis.

Current yield.

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Financial Management: Donalds trumpets on average pays 85 percent interest on its
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