aylapn Styles 1. Assume the common stock has just paid a dividend of $2.00. If the expected long-rum growth rate for this stock is 6.0%, and if investors' required rate of retum is 12%, what is the stock price? 2. Assume the common stock has a current stock price, Po= $20. If the last dividend paid was $1.00, and the growth rate of the stock=6%, what is the stock's expected total return for the coming year? 3. Maxwell Corp expects to have a capital budget of $200,000 next year. The company wants to maintain a target capital structure with 40% debt and 60% equity, and its forecasted net income is $200,000. If the company follows the residual dividend policy, how much in dividends, if any, will it pay? 4. Maxwell Corp has 10,000 cumulative preferred shares that are entitled to dividends of $2.00 per share. It also has issued 5,000 common shares. Last year due to poor earnings the Board of Directors did not declare any dividends. This year, due to higher earnings the Board of Directors has declared dividends of $100,000. How would the dividends be allocated between the preferred shareholders and the common shareholders? 5. Maxwell stock sells for $200 per share and Management wants to get the price down to $40 per share. What stock split would be required to get to this price? 6. Suppose the Treasury Bill risk-free rate = 9%, Stock Market return=14%, and Maxwell's stock beta = 1.3 a What is the required return on Maxwell stock? b. If the expected inflation rate (Inflation Premium increased by 1%, what would be the: - Treasury Bill risk-free rate required return on Maxwell stock