1the common stock of wetmore industries is valued at 608 a

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Reference no: EM13382033

1. The common stock of Wetmore Industries is valued at $60.8 a share. The company increases their dividend by 3.4 percent annually and expects their next dividend to be $4.1. What is the required rate of return on this stock?

a. 5.91

b. 8.46

c. 10.14

d. 15.82

2. A stock's next dividend is expected to be $0.9. The required rate of return on stock is 11.3%, and the expected constant growth rate is 7.6%. What is the stock's current price?

a. 19.28

b. 24.32

c. 8.28

d. 23.67

3. ABC just paid a dividend of D0 = $0.6. Analysts expect the company's dividend to grow by 34% this year, by 24% in Year 2, and at a constant rate of 7% in Year 3 and thereafter. The required return on this stock is 15%. What is the best estimate of the stock's current market value?

a. 16.86

b. 11.54

c. 9.87

d. 8.35

4. If last dividend = $4.6, g = 3.8%, and P0 = $77.3, what is the stock's expected total return for the coming year?

a. 9.98

b. 5.38

c. 7.37

d. 4.84

5. ABC's stock has a required rate of return of 17.2%, and it sells for $34 per share. The dividend is expected to grow at a constant rate of 7.2% per year. What is the expected year-end dividend, D1?

a. 1.78

b. 2.74

c. 3.94

d. 3.40

6. A stock just paid a dividend of $1.7. The required rate of return is 9.6%, and the constant growth rate is 4.8%. What is the current stock price?

a. 37.12

b. 64.24

c. 23.96

d. 15.98

7. ABC's last dividend was $3.4. The dividend growth rate is expected to be constant at 27% for 3 years, after which dividends are expected to grow at a rate of 7% forever. If the firm's required return (rs) is 16%, what is its current stock price (i.e. solve for Po)?

a. 47.97

b. 65.31

c. 37.85

d. 48.91

8. A stock is expected to pay a dividend of $0.5 at the end of the year. The required rate of return is rs = 9.6%, and the expected constant growth rate is g = 6.1%. What is the stock's current price?

a. 4.98

b. 6.92

c. 11.59

d. 14.29

9. The common stock of Connor, Inc., is selling for $25 a share and has a dividend yield of 4 percent. What is the dividend amount?

a. 7

b. 2

c. 3

d. 1

10. A stock just paid a dividend of D0 = $1.1. The required rate of return is rs = 9.2%, and the constant growth rate is g = 6%. What is the current stock price?

a. 36.44

b. 18.3

c. 10.89

d. 9.16

Reference no: EM13382033

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