2.5 points The following three defense stocks are to be combined into a stock index in January 2019 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance): Price 1/1/20 Douglas McDonnell Dynamics General International Rockwell Shares (millions) 200 300 390 1/1/19 $ 70 51 80 $ 73 46 69 1/1/21 $ 87 60 86 Compute the rate of return on an equally weighted index of the three defense stocks for the year ending December 31, 2020. -6.42% 13.87% -5.84% 1.86% 24.75% 2.5 points The Cruise Ship Co. has taxable income of $3,500,000. The company paid out $550,000 in interest expense. The tax rate is 21% and the dividend payout ratio is 30%. What is the amount that was paid out in dividends? $420,000 $780,000 $829,500 $682,500 $550.000 4 2.5 points Yankees, Inc. (YANK) has current earnings per share of $1.96 and an expected earnings growth rate of 2.2%. The required return on the stock is 13% and the current book value per share is $12.70. Estimate the price of YANK using the Residual Income Model? O $15.07 $16.31 $15.62 $16.67 $15.96 2.5 points An analyst gathered the following year-end price level data for an economy. What is the economy's annual inflation rate for 2016? 2014 190.3 2015 2012 2016 207.1 0 2.22% 2.93% 2.68% 2.42% O 2.87% 2.5 points Lambert Corporation reported EBIT of $60 million for last year. Depreciation expense totaled $20 million and capital expenditures came to $5 million. Free cash flow is expected to grow at a rate of 4.5% for the foreseeable future. Lambert faces a 40% tax rate and has a 0.45 debt to equity ratio with $255 million (market value) in debt outstanding, Lambert's equity beta is 1.30, the risk-free rate is currently 5% and the market risk premium is estimated to be 6.5%. What is the current total value of Lambert's equity (in millions)? O $840.61 $490.38 $731.20 $951.26 $655.90