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1.) If the current market price for a stock is $50.00, what is the markets expectation for the growth rate of the companys dividends if

1.) If the current market price for a stock is $50.00, what is the markets expectation for the growth rate of the companys dividends if the dividends one year from now are expected to be $2.00 per share and the required rate of return for the companys level of risk is 11.0%? A.) 0% B.) 4.5% C.) 7.0% D.) 15.0% E.) None of the above _____ 2.) The current price of a company is $33.00/share. The company earnings are $2.50/share, and the company has a required return of 14% based on the stocks level of risk. How much of the current price is attributed to the present value of growth opportunities? A.) $0.00 B.) $4.27 C.) $15.14 D.) $17.86 E.) None of the above _____ 3.) You invest using the Rule #1 investment strategy. The company you are analyzing has an operating income of $600 million. If the company debt is $900 million, the company equity is $400 million, and its tax rate is 21%, what is the companys return on invested capital? A.) 9.7% B.) 36.5% C.) 46.2% D.) 58.4% E.) None of the above _____ 4.) If the total intrinsic value of a company is $700 million, and the company has $160 million in total debt and $130 million in preferred shares, what is the intrinsic value of the companys stock price if the company currently has 50 million common shares outstanding? A.) $8.20/share B.) $10.75/share C.) $17.50/share D.) $31.75/share E.) None of the above

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