15. (3 points) KJ's Fun Spot stock currently sells for $ 17.75 per share. The stock just paid a dividend of s i 80 per share (hint: Do" $1.80). The expected dividendgrowth rate is 3 % What is an investor's Required Rate of Return (Ks) for an investment in KJ's stock? A. 8.59 % B. 9.46 % C. 10.45% D. 13.45% 16. (3 points) An investor is considering buying stock in KSB Company. KSB is expected to pay a year-end dividend (DI) of SO 88 per share. The stock's Beta is 1.2. The Risk Free Rate is 44 %, and the Market Risk Premium is 8 % Dividend Growth (G) is expected to be constant. The current stock pnce is $36 00 per share. Assuming the Stock Market is in "equilibrium", what is KSB's estimated stock price in three (3) years? A. $ 12.03 B. $ 36.88 C. $41.04 D. $ 49.98 17. (3 points) The Lion's Corporation (TLC) is a manufacturer of "unpadded football helmets"& "dropped-bal receivers' mittens". Financial Analysts project Free Cash Flows (FCF's) during the next 3 years as illustrated below. After year 3, FCF's are expected to grow at 7 % per year (from concession stand sales). TLC's WACC 14 %. TLC has 10 million shares outstanding and $100 million debt on its Balance Sheet. What pncepa share should an investor be willing to pay for TLC stock (except for the %'s, all #'s are in S million)? Time Period (end of year)1 FCF -15 10 35 A. $ 22.61 B. S 27.93 C. $37.93 D. $ 42.79 SML Equation: Required Rate of Returm Risk-Free Rate + (Market Premium) (Beta Coefficient) RRR (k) k(RF) + (k-Market-k-RF) (Beta) K(s) ; (DI / Po) + G DI = (Do) (1 + G) G-Growth Rate FCF (n + 1) Terminal = ECEmatG) Value WACC -G