1. "Assume that the interest rate is 12.5% per year and you expect to receive the following stream of annual cash flows (The year 0 cash flow occurs today and the year 4 cash flow occurs exactly 4 years from today): (Year 0: $12,700); (Year 1: $26,700); (Year 2: $11,900); (Year 3: $21,250); (Year 4: $12,350); What is the current Present Value (PV0) of the stream of cash flows?"

		"$65,522 "
		"$69,840 "
		"$69,919 "
		"$68,470 "
		"$84,900 "
		"$60,863 "

2. "If a stock pays no dividends to its shareholders, what is an alternate approach one can use to determine the stock's fair market price?"

		Constant growth model
		Variable growth model
		Dividend discount model
		P/E ratio X Earnings per share
		None of these choices are correct

3. A firm is expected to pay a dividend of $9.69 next year and $10.17 the following year and financial analysts believe the stock will be at their target price of $114.25 in two years -Compute the value of this stock assuming a required return of 15.50%.

		$101.66
		$134.11
		$117.41
		$88.01
		$116.11
		$90.16
		$154.90

4. "If a preferred stock from the FIN340 Company pays $8.31 in annual dividends and the required return on the preferred stock is 7.4%, what is the current value of the stock? "

		$7.74
		$8.92
		$120.61
		$104.56
		$8.33
		Not Possible to Calculate with the Data Provided
		$112.30