What is the required return on the company stock

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Q1. Glenhill Co. is expected to maintain a constant 6.2% growth rate in its dividends indefinitely. If the company has a dividend yield of 8.0%, what is the required return on the company's stock?

Q2. Consider the following two mutually exclusive projects:

Cash Flow (A) Year 0 -360000, Year 1 46000, Year 2 66000, Year 3 66000, Year 4 441000

Cash Flow (B) Year 0 -53000, Year 1 26000, Year 2 23000, Year 3 20500, Year 4 15600

Whichever project you choose, if any, you require a 15% return on your investment.

1. What is the IRR for each project?

2. What is the profitability index for each project?

Reference no: EM133038715

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