#16. The earnings and dividends of MicroSun Computer Co. are expected to grow at an annual rate of 15% over the next 4 years and then slow to a constant growth rate of 8% per year. MicroSun currently pays a dividend of $0.50 per share. What is the value of MicroSun stock to an investor who requires a 14% return?

A. 9.31

B. 15.73

C. 11.35

D. 12.56

#17. The largest number of NYSE members are registered as

A. Specialists

B. Commission Brokers

C. Floor Brokers

D. Floor Traders

#18. At the beginning of the year you buy 100 shares of sock for $14.35 per share. During the year the stock pays $1.50 in dividends per share. At the end of the year you sell the stock for $14.00. What is your dividend yield?

A. 8%

B. 6.5%

C. 10.45%

D. 7.2%

#19. The disadvantages of the payback approach include:

A. Cash flows after the payback period are ignored in the calculation

B. Payback ignores the time value of money

C. Payback fails to provide an objective decision-making criterion

D. All of the above

#20. The relationship between NPV and IRR is such that:

A. Both approaches always provide the same ranking of alternative investment projects

B. The IRR on an investment is the required rate of return that results in a zero NOV when it is used as the discount rate

C. If the NPV of a project is negative, the IRR must be greater than the cost of capital

D. None of the above