1-EasyWay Corporation has an expected ROE of 15%. If it pays out 30% of its earnings as dividends, its dividend growth rate will be _____.

15%

10.5%

30%

4.5%

2-Todd's Corporation is expected to pay a dividend of $3 in the upcoming year. Dividends are expected to grow at the rate of 8% per year. The risk-free rate of return is 5%, and the expected return on the market portfolio is 17%. The stock of Todd's Corp. has a beta of .75. Using the constant-growth DDM, the intrinsic value of the stock is _________.

37.50

17.65

50

4

3.Sanders, Inc., paid a $4.00 dividend per share last year and is expected to continue to pay out 60% of its earnings as dividends for the foreseeable future. If the firm is expected to generate a 13% ROE in the future, what is the growth rate of the dividends?

7.8%

5.2%

13.0%

4.8%

4.Refering to question 3, if you require a 15% return on the stock. What is the value of the stock?

$26.67

$35.19

$42.94

$59.89

5.Rose Hill Trading Company is expected to have EPS in the upcoming year of $6.00. The expected ROE is 18.0%. An appropriate required return on the stock is 14%. If the firm has a plowback (retention) ratio of 70%, its dividend in the upcoming year should be _________. $1.44

$2.40

$1.80

$1.12

6.Refer to question 6, the intrinsic value of Rose Hill Trading's share should be _________.

$69.77

$20.93

$128.57

$150.00

7. __________ is defined as the present value of all cash proceeds to the investor in the stock.

market capitalization rate

plow-back ratio

dividend payout ratio

intrinsic value