1.) If shareholder's required return on a share of common stock increases, then according to the discounted cash flow approach to valuation, the price of the stock should:

a.) Not enough information to tell

b.) Remain the same

c.) Decrease

d.) Increase

2.) Using the Dividend Growth Model for Stock Valuation, g represents which of the following?

a.) The rate used to discount future cash flows

b.) The expected constant growth rate in dividends and share price

c.) Future cash flow

d.) The current value of stock

3.) bill bixby has just given an insurance company $40,000. In return, he will receive annuity of $7,423 annually for 12 years. At what rate of return must the insurance company invest this $40,000 in order to make the annual payments?

a.) 12.00%

b.) 16.00%

c.) 15.14%

d.) 8.64%