1.DH LTD reported EPS of $1.4

for the last financial year ( t=0 year) and paid its annual dividend today. The market price of the company is $29.68, consistent with the prediction of the multi-stage growth model. DH's expected growth rate of earnings is 6% in this year. If the PVGO is $11.13, then the required rate of return of equity of DH is closet to

A 9.2%

B 8.75%

C 8%

D 7.63%

E 4.8%

2.Investors who rely on company financial reports and new announcements will make positive abnormal return. If

1. Technical analysis can only make normal returns
2. The stock market is semi strong form efficient
3. The stock market is weak form efficient, but not semi strong and strong form efficient
4. Insiders can make positive abnormal returns
5. Insiders can only make normal returns

3. BA announces today that it will borrow 600 million from the bond market and use the proceeds to repurchase its own stocks. There hasn't been any other information that may influence the stock price.

If the assumptions of the pecking order theory hold and the stock market is semi-strong efficient but not strong form efficient. the share price of the company should

A increase immediately after this announcement is made

B stay unchanged after this announcement is made

C decline immediately after this announcement is made

D move randomly up or down after this announcement is made

E decline before this announcement is made

4.Which of the following statement about risk free government bonds is incorrect, assume the investors will hold bonds to their maturities.

1. The yield to maturity of premium bonds is lower than the coupon rate of the bonds.
2. Premium bonds have a positive expected capital return.
3. Discount bonds have a nonnegative income return.
4. The yield to maturity of zero coupon bonds is equal to the capital return of the bonds
5. par bonds have a zero expected capital return