5. A broker offers to sell you shares of Bay Area Healthcare, which just paid a dividend of $2 per share. The stock's price is $30 a share. The dividend is expected to grow at a constant rate of 5% per year. The stock's required rate of return is 12%. What is the expected total return yield (this is the expected dividend yield + expected capital gains yield) for each of the next three years?

Choice: 8%

Choice: 10% C

hoice: 12%

Choice: 14%

6. Assume the risk-free rate is 6% and the market risk premium is 7%. The stock of Physicians Care Network (PCN) has a beta of 1.5. The last dividend paid by PCN (D0) was $2 per share. What would PCN's stock value be if the dividend were expected to grow at a constant rate of negative 5%.

Choice: $6.00

Choice: $8.84

Choice: $9.50

Choice: $17.60

7. Assume the risk-free rate is 5% and the market risk premium is 8%. The stock of Physicians Care Network (PCN) has a beta of 1.5. The last dividend paid by PCN (D0) was $2 per share. What would PCN's stock value be if the dividend were expected to grow at a constant rate of 0%.

Choice: $0.00

Choice: $5.05

Choice: $11.77

Choice: $20.40

8. Assume the risk-free rate is 6% and the market risk premium is 6%. The stock of Physicians Care Network (PCN) has a beta of 1.5. The last dividend paid by PCN (D0) was $2 per share. What would PCN's stock value be if the dividend were expected to grow at a constant rate of 10%.

Choice: $35.00

Choice: $40.00

Choice: $44.00

Choice: $50.00