1. Boots Roofing just paid its annual dividend of $.90 a share. The firm recently announced that all future dividends will be increased by 3% annually. What is one share of this stock worth to you if you require a 12% rate of return?

3. A.

   $10.30

   B.

   $10.35

   C.

   $10.59

   D.

   $10.78

   E.

   $10.96

6. 7 points

Question 5

1. 1. A stock is currently selling for $79 per share. Your required return for this type of stock is 12%. If the stock just paid a dividend of $4, what must the growth rate be?

      	A.	6.94%
      	B.	4%
      	C.	5.06%
      	D.	12.43%
      	E.	8.32%

2. 7 points

Question 6

The payback period is the period of time it takes an investment to generate sufficient cash flows to:

	A.	earn the required rate of return.
	B.	produce the required net income.
	C.	produce a yield equal to or greater than the market rate on similar investments.
	D.	have a cash inflow, rather than an outflow, for the year.