15.Nes Tech is expanding rapidly. As a result, the company expects to pay annual dividends of $.62, .90, and $2.1 per share over the next three years, respectively. After that, the dividend is projected to increase by 3 percent annually forever. What is the current value of this stock if the required return is 16 percent?

a.

$19.67

b.

$17.63

c.

$13.21

d.

$6.58

e.

$8.49

16.A firm uses its own weighted average cost of capital to evaluate the proposed projects for all its divisions. By doing so, the firm:

a.

may end up accepting too many projects in its riskiest division.

b.

allocates capital funds evenly among its divisions.

c.

maintains the current risk level and capital structure of the firm.

d.

automatically maximizes the total value created for its shareholders.

e.

encourages the division managers to recommend only their most conservative projects.