8) L-) relates risk to return, for a given set of market conditions. If which of the following would most likely occur? 8) The security ma byPhe market risk premium would increase C) The SML line would shift up. D) The slope of the SML would increase of 9) Historically, Jones Trucking has had a P/E ratio of 14.6, This ratio is considered a good estimate the future ratio The EPS growth rate is 4.5 peroent. What is the expected price of this stock one year from now? f . The firm has current net income of $92,000 with 85,000 shares of stock outstanding A) 16.51 B) 15.80 C) 15.32 D) 17.10 10) Main 10 Street Antiques just paid an annual dividend of $2.20 per share. The company is slowly downsizing and is decreasing its dividend by 3 percent annually. What is the current value of this A) 42.68 B) 19.4 C) 45.32 D) 20.6 l 1) Currently, the expected return on the market is 12.5% and the required rate of return for Alpha, Inc m is 12.5%. The risk-free rate is smaller than 5% Therefore, Alpha's beta must be A) less than 1.0. B) equal to 1.0 C) greater than 1.0. D) unknown based on the information provided 12) JJ Industry will pay a regular dividend of s3.6 per share for the next five years. At the end of the 12) fifth year, the company will also pay out a liquidating dividend. If the current shre price is $30 and the discount rate is 10%, what must the liquidating dividend be? A) 70.29 C) 27.22 D) 34.93 13) Upwind Tours just announced that it will pay an annual dividend of s2.40 a share one year from 13) now. Two years from now, the company expects to pay a dividend of $3.60. Three years from now,the company will pay $28 a share liquidating dividend. After that, the company will cease operations, What is the current value per share at a discount rate of 10 percent? A) $26.19 B) $29.16 C) $24.97 D) $25.32 14) Winifred, Inc. is going to pay $2.64 as an annual dividend per share for next year. The company is 14) expected to increase their annual dividends by 2% each year. How much should you pay to purchase one share of this stock if you require a 8% rate of return on this investment? A) $43,14 C) $44.00 D) $28.15 15) Martin's Inc is expected to pay annual dividends of $5 a share for the next two years. After that, 15) dividends are expected to increase by 4% annually, what is the current value of this stok to you you require a 9% rate of return on this investment? if A) 539.47 B) $92.96 C) 596.33 D) $41.81 16) Long-term financing decisions commonly occur in the 16) A) secondary markets C) capital markets B) money markets D) option markets