1)Dorpac Corporation has a dividend yield of 1.2%. Its equity cost of capital is 7.8%and its dividends are expected to grow at a constant rate.

a. What is the expected growth rate of Dorpac's dividends?

b. What is the expected growth rate of Dorpac's share price?

a. What is the expected growth rate of Dorpac's dividends?

a. The growth rate will be %. (Round to one decimal place.)

b. What is the expected growth rate of Dorpac's share price?

What is the expected growth rate of Dorpac's share price

A.With constant dividend growth, the share price is expected to grow at rate g=6.6%.

B.With constant dividend growth, the share price is expected to grow at rate g=1.2%.

C.With constant dividend growth, the share price is expected to grow at rate g=6.6%1.2%=5.4%.

D.With constant dividend growth, the share price is expected to grow at rate g=7.8%.

2)An investor has the opportunity to invest in four new retail stores. The amount that can be invested in each store, along with the expected cash flow at the end of the first year, the growth rate of the concern, and the cost of capital is shown for each case. It is assumed each investment will operate in perpetuity after the initial investment. Which investment should the investor choose?

A.Initial investment: $100,000; Cash flow in year 1: $12,000; Growth Rate: 1.25%; Cost of Capital: 9.5%

B.Initial investment: $90,000; Cash flow in year 1: $10,000; Growth Rate: 1.50%; Cost of Capital: 9.1%

C.Initial investment: $80,000; Cash flow in year 1: $8000; Growth Rate: 1.75%; Cost of Capital: 8.4%

D.Initial investment: $60,000; Cash flow in year 1: $6000; Growth Rate: 2.50%; Cost of Capital: 7%

2) You own 30% of the stock of a company that has 10 directors on its board. How much representation can you get on the board if the company has cumulative voting? How much representation can you ensure if the company has straight voting?

How much representation can you get on the board if the company has cumulative voting?(Select the best choice below.)

A.With cumulative voting you vote on each director individually, and without a majority of the shares you cannot ensure that your representative will win any of the elections (you could lose 70% to 30% in each of the ten individual elections).

B.With cumulative voting you are able to get proportional representation by putting all of your votes toward 3 directors, allowing you to elect representatives to 3 seats (30% of ten seats) on the board.

How much representation can you ensure if the company has straight voting?(Select the best choice below.)

A.With non-cumulative voting you are able to get proportional representation by putting all of your votes toward 3 directors, allowing you to elect representatives to 3 seats (30% of ten seats) on the board.

B.With non-cumulative voting you vote on each director individually, and without a majority of the shares you cannot ensure that your representative will win any of the elections (you could lose 70% to 30% in each of the ten individual elections).