5. YouRock Nippster has a required rate of return of 13.4%. The company is experiencing a highly abnormal growth rate of 30%. This growth rate is expected to continue for three years. After year three, the growth rate is expected to return to a normal 8% and remain constant forever. If the companys last paid dividend was $1.15 what would be the market value (P₀) for this supernormal growth rate stock? (Points : 3)

$25.32 $33.42 $39.21 The question cannot be answered with the information given above

18. A college student owns two securities: TIMBA and SIMBA. TIMBA has an expected return of 15 percent with a standard deviation of those returns being 11 percent. SIMBA has an expected return of 12 percent, and a standard deviation of 7 percent. The correlation of returns between TIMBA and SIMBA is 0.81. If the portfolio consists of $6,000 in SIMBA and $4,000 in TIMBA, what is the expected standard deviation of portfolio returns? (Points : 3)

8.18% 13.20% 8.60% 9.71%

29.The advantages of long-term debt exclude: (Points : 3)

decrease in financial risk relatively low, explicit after-tax cost owners are able to maintain control increased earnings per share through using financial leverage