9 The value of a stock may increase if 1. risk us increased 2. risk is decreased 3. investors' required rate of return increases 4. investors' required rate of return decreases (a) i and 2: (b) 1 and 4; (c) 2 and 3 (d) 2 and 4 10. The time value of money suggests 1. that the present is less attractive than the future 2. individuals prefer a dollar in the present to a dollar in the future 3. the present value of an annuity is negative 4. annuities are worth less than lump sums 11. If a stock's price is $90 and the stock is split three for one, the price becomes approximately 1. $90 2. $60 3. $45 4. $30 12. An increase in the cost of capital will 1. increase an investment's IRR 2. Decrease an investment' s IRR 3. increase an investment's NPv 4. decrease an investment' s NPV According to the "dividend-growth" model, the value of a stock does not depend on 1. future dividends 2. past dividends 3. future growth 4. investors' required rate of return 14. If the net present value of two mutually exclusive investments is positive, the firm should 1. make both investments 2. make neither investments. 3. make the investment with the highest present value 4. make the investment with the highest net present value. 15. If a bond is selling at a discount, that could imply 1. interest rates have fallen 2. interest rates have risen 3. the yield to maturity exceeds the current yield 4. the yield to maturity is less than the current yield (a) 1 and 3; (b) 1 and 4; (c) 2 and 3; (d) 2 and 4