5. The stock for a start-up company probably will pay no dividends until exactly 7 years from today. At that time it will pay $5 60 per year forever. You assess the intrinsic value of the stock with a 9 3% discount rate. Find the stock's intrinsic value today a. $47.01 b. $42.73 c $38.85 d. $35.32 $32.11 6 The company preferred stock just yesterday paid its annual dividend of $3.25 per share. Today's share price is $39.60 You believe the dividend yield is abnormally high but that it will revert to its normal value of 6.50%. Your strategy is to buy the stock today and receive annual dividends for 3 years. Upon receiving the last dividend you expect the dividend yield will be normal . Your strategy is to sell the stock at that time. Compute the expected annual rate of return for the strategy a 17.3% b157% c. 23.0% d 20.9% e 19.0% 7 The rates of return listed below for securities X and Y are equally likely Find the standard deviation and expected rates of return for securities X and Y, and also compare the two regarding dominance or tradeoff 2.6% 5,3% 24.8% 14 7% Y 18:4% 10.1% 15.6% 40% a. (Risk, return) equals (8 72% 11 85%) for X and (8,63% 1003%) for Y also X and Y coexist as tradeoffs b. (Risk, return) equals (8.63%, 10.03%) for X and (9.59%, 11.03%) for Y, also y dominates X c (Risk, return) equals (8.72%, 11.85%) for X and (863%, 10.0396) for Y also y dominates X d. (Risk return) equals (9.59% 11.03%) for X and (8.63% 11.03%) for Y also X and Y coexist as tradeoffs e (Risk, retum) equals (8 63%, 10.03%) for X and (9.59%, 11.03%) for Y also X and Y coexist as tradeoffs