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Which of the following statement is correct? Semi-strong form of market efficiency assumes that prices reflect all publicly available information. If you use the past pattern of prices to predict future prices, you believe that prices follow a random walk. Behavioral finance believes that investors are always rational. The market is strong-form efficient Which of the following statements is correct? Growth stocks usually have low P/E ratios. Historically, on average growth stocks outperform value stocks. The dividend discount model cannot be used for firms with low growth. In the Free Cash Flow (FCF) model, we discount the expected FCFs using the cost of capital. Early in the new year, Focus Shipping Inc. will need to raise $30 million by issuing a combination of stock & bonds. Their target Debt to Equity ratio is 3:1. Focus is in a 20% tax bracket and shareholders required rate of return includes a dividend yield of 2.5% and an expected constant growth rate of 8%. New bonds will be issued at par and their yield to maturity is 9%. What is the company's WACC (weighted average cost of capital)? 7.50% 8.03% 9.68% 10.13% Fade Ltd's equity beta is 1.25, its common stock just paid a dividend of $0.40/share. The risk-free rate is 1.86%. The current market risk premium is 5.12%. The stock's dividend rate is expected to grow at some constant rate g=0.05. Assuming you believe in the CAPM model, what is your best estimate of share price today? 11.43 12.27 12.88 13.35