b. $26.44 c $24.48 d. $31.25 e. $37.50 Ahmad purchased 400 shares of stock at a price of $26 per share. One year later, the shares were sold for $21. At the end of the year, a $2.20 per share dividend was paid. Calculate the total dollar return for the investment a. $880 b. $2,880 c. -$1,120 d. -$2,000 e. -$2,880 6. 7. You are planning to purchase the stock of Iiham Rasa Inc. and you expect it to pay a dividend of $3 in 1 year, $4.25 in 2 years, and $6.00 in 3 years. You expect to sell the stock for $100 in 3 years. If your required return for purchasing the stock is 12 percent, how much would you pay for the stock today? a. $75.45 b. $77.24 c. $81.52 d. $85.66 Billy Bob Co. contemplates acquiring another firm. The acquisition would slightly increase Billy Bob's risk from a beta of 1.0 to a beta of 1.1. If T-bills current provide a return of 6. and the long-term return on the stock market is 11.0%, then Billy Bob's cost of equity is a. 6.0% b. 11.0% c. 14.3% d. 15.0% e. 11.5% 8. 9. What is the maximum price Nurhaliza should pay for Ramunia Corp. commorn stock if her required return is 5% and she expects to sell the stock in one year for $50 per share, immediately after she receives a $.50 per share dividend? a. $50.00 b. $48.10 c. $48.00 d. $45.00 e. $40.73 10. Compute the risk premium for the stock of Syefa Corp. if the risk free rate is 6%, the expected market return is 12%, and Syef's stock has a beta of 0.8. a. 10.8% b. 4.8% C. 48.8% d. 16.8% e, 6%