Rate of return of investments

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1) The Busby Corporation had a share price at the start of the year of $25.70?, paid a dividend of $0.53 at the end of the? year, and had a share price of $30.25 at the end of the year. Which of the following is closest to the rate of return of investments in companies with equal risk to The Busby Corporation for this? period?

A. 17.70%
B. 16.79%
C. 20.00%
D. 15.82%

2) Sultan Services has 1 million shares outstanding. It expects earnings at the end of the year of $5.90 million. Sultan pays out? 60% of its earnings in total? - 40% paid out as dividends and? 20% used to repurchase shares. If? Sultan's earnings are expected to grow by 5?% per? year, these payout rates do not? change, and? Sultan's equity cost of capital is 11?%, what is? Sultan's share? price?

A. $13.40
B. $59.00
C. $23.60
D. $11.80

3. You are considering purchasing a new home. You will need to borrow $290,000 to purchase the home. A mortgage company offers you a 15?-year fixed rate mortgage ?( 180 ?months) at 9% APR ?( 0.75?% ?month). If you borrow the money from this mortgage? company, your monthly mortgage payment will be closest? to:

A. $4,117
B. $4,706
C. $2,353
D. $2,941

4) What must be the price of a $5,000 bond with a 6.1?% coupon? rate, semiannual? coupons, and ten years to maturity if it has a yield to maturity of 8?% ?APR?

A. $6,096
B. $5,225
C. $3,484
D. $4,354

5. OwenInc has a current stock price of $13.10 and is expected to pay a $0.95 dividend in one year. If? OwenInc's equity cost of capital is 11?%, what price would? OwenInc's stock be expected to sell for immediately after it pays the? dividend?

A. $10.87
B. $13.59
C. $14.54
D. $9.51

Reference no: EM133076085

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