11. A stock that currently does not pay a dividend is expected to pay its first dividend of $1.00 five years from today. Thereafter, the dividend is expected to grow at an annual rate of 25% for the next three years and then grow at a constant rate of 5% per year thereafter. The required rate of return is 10.3%. the value of the stock today is closest to: A. $20.65 B. $22.72 C. $23.87 D. $18.22 O E. None of the above 12. Shanz Enterprises has a beta of 1.28. The real risk-free rate is 2%, investors expect a 3% future inflation rate, and the market risk premium is 4.7%. What is Shanz's required rate of return? * O A. 11.016% O B. 9.670% O C. 9.920% O D. 10.170% O E. None of the above 13. A stock just paid a dividend of DO = $1.50. The required rate of return is rs = 11.5%, and the constant growth rate is g = 4%. What is the current stock price? * O A. $20.11 B. $20.80 C. $24.31 O D. $24.93 O E. None of the above 14. If DO = $1.5, g (which is constant) 3.6%, and PO = $32.00, what is the stock's expected total return for the coming year? * O A. 8.37% B. 8.45% O C. 8.81% D. 9.03% O E. None of the above 15. Troll Inc. has an outstanding issue of perpetual preferred stock with an annual dividend of $9.5 per share. If the required return on this preferred stock is 6.5%, at what price should the stock sell? * O A. $104.27 B. $106.95 C. $109.69 D. $146.15 O E. None of the above 16. Banz Corporation just paid a dividend of DO = $0.75 per share, and that dividend is expected to grow at a constant rate of 4.5% per year in the future. The company's beta is 1.25, the required return on the market is 10.5%, and the risk-free rate is 4.5%. What is the company's current stock price? * O A. $10.45 B. $10.89 C. $12.26 D. $12.64 E. None of the above 17. Panama's stock has a required return of 12%, and the stock sells for $40 per share. The firm just paid a dividend of $1, and the dividend is expected to grow by 30% per year for the next 4 years, so D4 = $1(1.30)4 = $2.8561. After t = 4, the dividend is expected to grow at a constant rate of X% per year forever. What is the stock's expected constant growth rate after t = 4, i.e., what is X? * O A. 5.17% B. 5.44% O C. 5.72% D. 6.34% O E. None of the above 18. Dual Power Company is expected to pay a dividend of $4 next period, and dividends are expected to grow at 6% per year. If the required return is 16% and the current price (PO) is $40, what is the stock price at year 4 (P4)? * A. $45.10 B. $48.20 C. $50.49 D. $52.30 E. None of the above 19. Suppose a firm is expected to increase dividends by 20% in one year and by 15% in two years. After that, dividends will increase at a rate of 5% per year indefinitely. If the next dividend is $1.20 and the required return is 20%, what is the price of the stock? * A. $6.51 B. $7.81 C. $8.67 D. $9.64 E. $9.66 20. The last dividend (DO) of stock Y was $2.25 and g (which is constant) = 4%. If the stock price is $50, what is the stock's expected dividend yield for the coming year? O A. 4.12% B. 4.68% C. 4.99% D. 5.13% O E. None of the above