A firm recently paid a dividend of $2.65 per share, but analysts expect the dividend to increase by 5% per year. The risk free rate is 2.5% and the market risk premium is 8%. If its beta is 1.65 and the market is in equilibrium what is the value of the stock?

A firm recently paid a dividend of $1.75. It expects to have non-constant growth of 25% for 3 years, followed by a constant rate of 7% thereafter. The firms required return is 17%. What is the firms intrinsic value today, to the nearest dollar?

UNO Ltd. has bonds outstanding with 11 years remaining maturity. Interest is paid semiannually at a coupon rate of 10.5%. The YTM on these bonds is 4.5%. The bonds current price is approximately

Yield BBB Bonds AA Bonds T-Bonds Maturity Use the graph to help you answer this question. Which of the following statements is true? The default spread between corporate bonds and Treasury securities is greater for shorter maturities The default spread between corporate bonds and Treasury securities is greater for longer maturities AA bonds have higher default risk than BBB bonds Both b and care true Which of the following statements is NOT CORRECT? The corporate valuation model can be used both for companies that pay dividends and those that do not pay dividends. The corporate valuation model discounts free cash flows by the required return on equity. The corporate valuation model can be used to find the value of a division. An important step in applying the corporate valuation model is forecasting the firm's pro forma financial statements. Free cash flows are assumed to grow at a constant rate beyond a specified date in order to find the horizon, or continuing, value