A stock that pays a constant dividend of $3.50 currently sells for $30.00. What is the required rate of return? 11.67% 11.50% 5 12.33% 12.00% A firm will pay out an annual dividend of $4 next year. If the dividend will grow by 5% annually forever, and the stock is currently selling for $35, what is the required rate of return for the stock? 17.00% 16.43% 11.43% 12.00% Which of the following statements about the investment criteria is FALSE? Payback Period method ignores time value of money concept and it requires a subjective benchmark Payback Period method tends to accept short-term oriented projects. When a project's cash flows change sign more than once, then the project will have only one positive IRR. IRR rules can be problematic in making investment decisions with mutually exclusive cases. Which of the following statements about capital budgeting criteria is FALSE? IRR and NPV rules may give conflicting decisions if the two projects under consideration are mutually exclusive. Payback period rule ignores the time value of money while discounted payback period rule does not. O O When the first cash flow (year 0) is negative and the remaining cash flows are positive, we might have multiple IRRs. In general, if each of the two independent projects under consideration has positive NPV, we should accept both projects