A -

Gizmo Industries is currently selling for $90. It just paid its annual dividend of $3, which have consistently grown at a rate of 7.5%. What is the expected return of this stock?

Set your calculator to 4 decimal places. PLEASE INPUT THE ANSWER IN PERCENT ROUNDING IT TO 2 DECIMALS. DO NOT INCLUDE % SIGN, E.G., INSTEAD OF 9.9922% INPUT 9.99

B -

Gizmo Industries, recently issued $67 par value preferred stock that pays an annual dividend of $7. If the stock is currently selling for $89, what is the expected return of this preferred stock?

Set your calculator to 4 decimal places. PLEASE INPUT THE ANSWER IN PERCENT ROUNDING IT TO 2 DECIMALS. DO NOT INCLUDE % SIGN, E.G., INSTEAD OF 9.9922% INPUT 9.99

C -

Gizmo Industries, is trying to decide whether to invest to automate a production line. If the project is accepted, labor costs will decrease by $553,000 per year. However, other cash operating expenses will increase by $245,000 per year. The equipment will cost $257,000 and is depreciable over 9 years using simplified straight line to a zero salvage value. Crossroad will invest $3,000 in net working capital at installation. The firm has a marginal tax rate of 34%. Calculate the firm's annual cash flows associated with the new project.

Set your calculator to 4 decimal places and round to a whole number at the end. Do not enter the dollar sign. For example, if your answer is 1,000, enter it as 1000.