14 15 answer only

LCP, a new medical group, just paid (moments before time O) a dividend of $1.00. These dividends are expected to grow at 20% a year for the next two years (i.e., t-1 and t-2), and at 4% a year thereafter, what is the value of the stock if the discount rate is 12%? 14. a. Equal to $15 b. Between $15 and $16 c. Between $17 and $18 d. Greater than $18 15. The market value of Charon Ferries' common stock is $16 million and the market value of its risk- free debt is $4 million. The beta of the company's common stock is 1.5 and the expected risk premium on the market portfolio is 8 percent. There are no taxes. If the Treasury bill rate is 5 percent, what is the company's cost of capital? Re = 5% + 1.5(8%) = 17% a. Less than 10% b. Between 13 and 15% C. Between 16 and 18% d. Between 19 and 21%