1.You believe that a corporation's dividends will grow 5% on average into the foreseeable future. The company's last dividend payment was $5. You require a rate of return of ke = 12%. Which formula would you use to calculate the current price of the stock?

(a) P0 = P t=0 Dt /(1+ke)*t

(b) P0 = D0(1+g) /keg .

(c) P0 = D1/ 1+ke + P1 /1+ke .

(d) Any one of the above.

2.Given the interest rate i, the present value of an asset that promises payments of $100 in 4, 5, and 6 years from now can be calculated as

(a) 100 /(1+i)*15 ;

(b) 300 /(1+i)*4 ;

(c) 100 /(1+i)*5 + 100 /(1+i)*6 + 100 /(1+i)*7 ;

(d) non of the above.

3.You believe that a corporation's dividends will grow 5% on average into the foreseeable future. The company's last dividend payment was $5. You require a rate of return of ke = 12%. Which formula would you use to calculate the current price of the stock?

(a) P0 = P t=0 Dt/ (1+ke)*t

b) P0 = D0(1+g)/ keg .

(c) P0 = D1 /1+ke + P1 /1+ke .

d) Any one of the above.