7) Jayza corp. paid $2 in dividends last year. It has just announced that it expects to increase its dividends by 2% each year for the foreseeable future. Currently, MIKO stock is priced at $40 per share. What is the rate of return on stock? Select one:

a.7.1%

b.6.1%

c.5.96%

d.6.61%

9) The company is expected to pay a quarterly dividend of $4 on a preferred share and the required rate of return is 10% with quarterly compounding. What is the price of the share? Select one:

A.$140

B.$40

C.$60

D.$160

E.$21.04

12) Find the Present Value (PV) of the following set of unequal cash flows:

Year 1: 1,000; Year 2: 1,500; Year 3: 0; Year 4: 2,500; Year 5: 3,000. Assume a 10% interest rate. Try to solve the problem using both algebra and the cash flow worksheet on the calculator.

Select one:

a.$5719.06

b.$8,322.01

c.$9,210.60

d.$10,576.68

e.$7,017.54

14) To determine the expected market value (or intrinsic value) of any asset, we need to know just three things. Which of the following statements are correct with respect to what is needed to determine value?

Select one:

a.Need to know the size of the expected future cash flows

b.Need to know the timing of the expected future cash flows

c.Need to know the discount rate to apply to the expected future cash flows

d.All of the above statements are true

15) Suppose that sales and profits of Oly Enterprises are growing at a rate of 30% per year. At the end of four years the growth rate will drop to a steady 4%. At the end of year 5, Oly will pay its first dividend in the amount of $2 per share. If the required return is 16%, what is the value of a share of stock? Assume dividends grow at the same rate as earnings after year 4. Select one:

a.$9.20

b.$7.49

c.$7.67

d. $8.17