What is its nominal annual rate of return

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Reference no: EM131981906

1. Hurley's preferred stock pays a dividend of $1.25 per quarter. If the price of the stock is $65.00, what is its nominal (not effective) annual rate of return?

A. 1.25%

B. 5%

C. 7.69%

D. 11.11%

2. Berkshire Hathaway's stock has a required rate of return of 12.50%, and it sells for $125.00 per share. Berkshire's dividend is expected to grow at a constant rate of 8.00%. What was the last dividend, D0?

A. $2.55

B. $5.21

C. $6.89

D. $8.85

3. Berkshire's free cash flow was just FCF0 = $1.50 Million. Analysts expect the company's free cash flow to grow by 25% this year, by 15% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The WACC for this company 10.00%. The Horizon Value for Berkshire is: ___________.

A. $26.19 Million

B. $45.28 Million

C. $59.90 Million

D. $100.75 Million

Reference no: EM131981906

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