Answer the following Problem below and show the explanation

7-1. One year ago. James Sirlank bought Dell Computer common stock for $20 per share. Today the stock is selling for $19 per share. During the year. James received four dividend payments. each in the amount of $0.20 per share. (a) What rate of return did James earn during the year? (b) What were the (1) dividend yield and (2) the capital gains yield associated with the stock for the year? 7-2. Last year. Julie Johnson bought one share of common stock for $950. During the year, Julie received a $47.50 dividend. Earlier today, she sold the stock for $988. (a) What rate of return did Julie earn on her investment? (b) What were the (1) dividend yield and (2) the capital gains yield associated with holding the stock? 7-3. Express Surgery Center's (ESC) preferred stock, which has a par value equal to $110 per share, pays an annual dividend equal to 9 percent of the par value. If investors require a 15 percent return to purchase ESC's preferred stock. what is the stock's market value? 7-4. The Ape Copy Company's preferred stock pays an annual dividend equal to $16.50. If investors demand a return equal to 11 percent to purchase Ape's preferred stock, what is its market value? 7-5. Out-ofSight Telecommunications (OST) has preferred stock outstanding with a par value of $40 per share that pays an annual dividend equal to 5 percent. (a) If investors who purchase similar investments require a 10 percent return, what is the market value of OST's preferred stock? (b) What would be the market value of the stock if investors require an 8 percent return? 7-6. Your broker offers to sell you shares of Wingler & Company common stock, which paid a dividend of $2 yesterday. You expect the dividend to grow at a rate of 5 percent per year into perpetuity. If the appropriate rate of return for the stock is 12 percent, what is the market value of Wingler's stock? 7-7. Alpine Ski Resort has grown at a constant rate. which equals 4 percent, for as long as it has been in business. This growth rate is expected to continue long into the future. A couple of days ago, Alpine paid common stockholders a dividend equal to $3 per share. If investors require a 10 percent rate of return to purchase Alpine's common stock, what is the market value of its common stock? 7-8. Since it started business 10 years ago, Alphafem Company has paid a constant $1.20 per share dividend to its common stockholders. Next year and every year thereafter. the company plans to increase the dividend at a constant rate equal to 2.5 percent per year. If investors require a 15 percent rate of return to purchase Alphafem's common stock, what is the market value of its common stock? 7-9. Suppose your company is expected to grow at a constant rate of 6 percent long into the future. In addition, its dividend yield is expected to be 8 percent. If your company expects to pay a dividend equal to $1.06 per share at the end of the year, what is the value of your rm's stock? 7-10. Ocala Company's stock is currently selling for $19.50 per share. At the end of the year, the company plans to pay a dividend equal to $2.34 per share. For the remainder of the company's life, dividends are expected to grow at a constant rate, and investors are expected to require a 16 percent return to invest in Ocala's stock. What should be the value of Ocala's stock ve years from now? 7-11. Since it has been in business. FoolsGold Jewelry has never paid a dividend. The company will not pay a dividend at the end of this year. However. two years from todayat the end of Year 2FoolsGold expects to pay a dividend equal to $0.50 per share, which it plans to increase by 6 percent each year thereafter for the remainder of the company's life. If investors require a 14 percent rate of return to purchase its common stock, what should be the market value of FoolsGold's stock today? 7-12. Minimight Company has never paid a dividend, and there are no plans to pay dividends during the next three years. But, in four yearsthat is, at the end of Year 4the company expects to start paying a dividend equal to $3 per share. This same dividend will be paid for the remainder of Minimight's existence. If investors require a 10 percent rate of return to purchase the company's common stock, what should be the market value of Minimight's stock today? I11!szIngcengagecorrvstaWnNuilsvcndex.hlr11l?deplcyrnentld=600628182209190134984838631 3h|SBN=9731 33T9158545|d=9570311928inbld=... 911412020 7-13. Since it has been in business, I-reeI-in has paid a $1 per share annual dividend. The company plans to pay a $1 dividend for the next two years. Beginning in three years, however, FreeFin plans to increase the dividend by 8 percent each year for the remainder of the company's life. If investors require a 17 percent rate of return to purchase FreeFin's common stock. what should be the market value of its stock today? 7-14. Forral Company has never paid a dividend. But, the company plans to start paying dividends in two yearsthat is, at the end of Year 2. The first dividend is expected to equal $2 per share. The second dividend and every dividend thereafter are expected to grow at a 5 percent rate. If investors require a 15 percent rate of return to purchase Forral's common stock, what should be the market value of its stock today? 7-15. Xtinct Artifacts has not paid a dividend during the past 10 years. However, at the end of this year. the company plans to pay a $1.50 dividend and a $2 dividend the following year (Year 2). Starting in three years, the dividend will begin to grow by 5 percent each year for as long as the firm is in business. If investors require an 11 percent rate of return to purchase Xtinct's common stock. what should be the market value of its stock today? 7-16. Sparkle Jewelers expects to pay dividends (per share) of $0.60. $0.90. $2.40, and $3.50 during the next four years. Beginning in the fifth year. the dividend is expected to grow at a rate 014 percent indefinitely. If investors require a 20 percent return to purchase Sparkle's stock. what is the current value of the company's stock? 7-17. Georgetown Motorcars' (GM) common stock normally sells for 19 times its earnings: that is. its PIE ratio equals 19. If GM's earnings per share are $3.70. what should be its stock price under normal circumstances? 7-18. For the past 15 years, the PE ratio of NorthlSouth Travel has been between 28 and 30. If NorthlSouth's earnings per share equal $4, in what price range would you estimate its stock should be selling? 7-19. RJS generated $65.000 net income this year. The rm's nancial statements also show that its interest expense was $40,000, its marginal tax rate was 35 percent, and its invested capital was $800,000. If its average cost of funds is 12 percent. what was RJS's economic value added (EVA) this year? 7-20. Backhaus Beer Brewers (BBB) just announced that the current scal year's net income was $1.2 million. BBB's marginal tax rate is 40 percent, its interest Print Preview expense for the year was $1.5 million. it has $8 million of invested capital. and its average cost of funds was 10 percent. What is BBB's economic value added (EVA) for the current year? 3M