14) Smith Corporation's preferred stock pays an annual dividend of $5.00 and currently approximate annual required rate of return on this stock? sells for $20. What is the A) 44% B) 25% C) 22.73% D) 0.23% 15) Judy is considering purchasing common shares of Swift Air. What price would she be willing to pay per share it the company is projected to pay S4 in dividends per share next year, dividends are expected to grow at 5% per year thereafter, and Judy requires an annual return of 10% on this investment? A) $40 B) $80 C) $84 D) $44 16) Last year, Andrew bought 100 common shares of Azusa Corporation at a price of $50 per share. Recently, he received $3 in dividends per share. The stock is currently trading at $58 per share. If Andrew sells his Azusa stocks now, what rate of return would he earn on this investment (assume there are no trading costs)? A) 6% B) 16% C) 0.22% D) 22% 17) Given the following information, which stock would a rational, risk-averse financial manager select? St. deviation, % Expected return, % 10 16 14 12 Stock 10 A) Stock A B) Stock B C) Stock C D) Stock D 18) Systematic risk is also referred to as a . A) business specific risk B) internal risk C) non-diversifiable risk D) maturity risk 19) Suppose you invest $20,000 into the following portfolio of stocks: 200 shares of Abbott Labs (ABT) at $50 per share, 200 shares of Lowes (LOW) at $30 per share, and 100 shares of Ball Corporation (BLL) at $40 per share. Suppose over the next year Ball has a return of 12.5%, Lowes has a return of 21%, and Abbott Labs has a return of -10%. Given this information, what is the annual rate of return on your portfolio? A) 10.55% B) 7.6% C) 3.8% D) 23.50% 20) What is the expected annual return on XYZ stock if it has a beta of 1.5, the expected return from a market portfolio is 18% per year, and the expected return from a risk-free investment is 2% per year? A) 56% B)61% C) 24% D) 26%