1.A firm has a return on equity of 15%, Earnings per share of $5 and is expected to pay $0.5 per share annual dividend. If you require 15.5% rate of return, how much are you willing to pay for this company's stock now?

$11.11
		$25
		$33.33
		$100

2.Investors are willing to purchase stocks having high P/E ratios because:

they expect these shares to sell for a lower price.

they expect these shares to offer higher dividend payments.

these shares are accompanied by guaranteed earnings.

they expect these shares to have greater growth opportunities.

3.Wilt's has earnings per share of $5 and dividends per share of $0.6. What is the firm's sustainable growth rate if its return on equity is 15%?

1.4%
		1.8%
		13.2%
		18.6%

4. What is the dividend payout ratio if the sustainable growth rate is 15% and the firm's ROE is 20%?

25%

50%

60%

75%