1. Imagine that you own 200 shares of stock in Delta and plan to sell it today in the secondary market. If Delta will receive no direct cash flow due to your sale, why would their management care about the price you get for your shares?
2. Elk City Utility recently paid a dividend of $3.73 per share. Dividends are expected to grow at a rate of 3.60%. Elk City stock currently sells for $37.95 per share. If you were on the utility regulatory commission, what rate of return would you allow Elk City to earn? (Round your answer to 2 decimal places.)
3. What are some concepts all investors should be interested in?