Reference no: EM13480718
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