Can you please answer the following 29 MCQ Questions finance question.Only answer if your rating is 3 and above. I am willing to give extra tip of 5$ if there are less than 3 wrong answers.

1.A share of common stock just paid a dividend of $1.00. If the expected long-run growth rate for this stock is 5.4%, and if investors' required rate of return is 13.9%, what is the stock price? (Points : 0.83) $11.04 $12.40 $13.76 $15.00 $9.42 2.Reddick Enterprises' stock currently sells for $40.50 per share. The dividend is projected to increase at a constant rate of 5.50% per year. The required rate of return on the stock is 9.00%. What is the stock's expected price 3 years from today? (Points : 0.83) $43.75 $58.02 $47.56 $53.74 $52.79 3.Schnusenberg Corporation just paid a dividend of $0.75 per share, and that dividend is expected to grow at a constant rate of 6.50% per year in the future. The company's beta is 1.65, the required return on the market is 10.50%, and the risk-free rate is 4.50%. What is the company's current stock price? (Points : 0.83) $10.92 $7.99 $9.30 $10.11 $10.41 The Ramirez Company's last dividend was $1.75. Its dividend growth rate is expected to be constant at 15% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its required return is 12%. What is the best estimate of the current stock price? (Points : 0.83) $42.76 $38.77 $36.24 $39.14 $36.60 The Isberg Company just paid a dividend of $0.75 per share, and that dividend is expected to grow at a constant rate of 5.50% per year in the future. The company's beta is 1.25, the market risk premium is 5.00%, and the risk-free rate is 4.00%. What is the company's current stock price, P? (Points : 0.83) $15.49 $16.66 $14.66 $19.32 $19.49 The Francis Company is expected to pay a dividend of D1 = $1.25 per share at the end of the year, and that dividend is expected to grow at a constant rate of 6.00% per year in the future. The company's beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 4.00%. What is the company's current stock price? (Points : 0.83) $22.83 $27.99 $27.17 $22.01 24.18 Gay Manufacturing is expected to pay a dividend of $1.25 per share at the end of the year. The stock sells for $21.50 per share, and its required rate of return is 10.5%. The dividend is expected to grow at some constant rate, g, forever. What is the equilibrium expected growth rate? (Points : 0.83) 4.87% 4.73% 5.34% 5.48% 4.69% Ackert Company's last dividend was $0.50. The dividend growth rate is expected to be constant at 1.5% for 2 years, after which dividends are expected to grow at a rate of 8.0% forever. The firm's required return (r) is 12.0%. What is the best estimate of the current stock price? (Points : 0.83) $10.28 $11.95 $10.04 $11.11 $13.98 Which of the following statements is CORRECT? (Points : 0.83) A major disadvantage of financing with preferred stock is that preferred stockholders typically have supernormal voting rights. Preferred stock is normally expected to provide steadier, more reliable income to investors than the same firm's common stock, and, as a result, the expected after-tax yield on the preferred is lower than the after-tax expected return on the common stock The preemptive right is a provision in all corporate charters that gives preferred stockholders the right to purchase (on a pro rata basis) new issues of preferred stock. One of the disadvantages to a corporation of owning preferred stock is that 70% of the dividends received represent taxable income to the corporate recipient, whereas interest income earned on bonds would be tax free. One of the advantages to financing with preferred stock is that 70% of the dividends paid out are tax deductible to the issuer. Two constant growth stocks are in equilibrium, have the same price, and have the same required rate of return. Which of the following statements is CORRECT? (Points : 0.83) The two stocks must have the same dividend per share. If one stock has a higher dividend yield, it must also have a lower dividend growth rate. If one stock has a higher dividend yield, it must also have a higher dividend growth rate. The two stocks must have the same dividend growth rate. The two stocks must have the same dividend yield. Which of the following statements is CORRECT? (Points : 0.83) A change in a company's target capital structure cannot affect its WACC. WACC calculations should be based on the before-tax costs of all the individual capital components. Flotation costs associated with issuing new common stock normally reduce the WACC. If a company's tax rate increases, then, all else equal, its weighted average cost of capital will decline. An increase in the risk-free rate will normally lower the marginal costs of both debt and equity financing. A company's perpetual preferred stock currently sells for $115.00 per share, and it pays an $8.00 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 5.00% of the issue price. What is the firm's cost of preferred stock? (Points : 0.83) 7.32% 5.93% 6.08% 6.00% 7.18% O'Brien Inc. has the following data: rRF = 5.00%; RPM = 6.00%; and b = 1.10. What is the firm's cost of equity from retained earnings based on the CAPM? (Points : 0.83) 11.83% 13.22% 11.25% 8.93% 11.60% Several years ago the Jakob Company sold a $1,000 par value, noncallable bond that now has 20 years to maturity and a 7.00% annual coupon that is paid semiannually. The bond currently sells for $950, and the company's tax rate is 40%. What is the component cost of debt for use in the WACC calculation? (Points : 0.83) 4.81% 4.49% 4.31% 5.48% 5.30% Which of the following statements is CORRECT? (Points : 0.83) The regular payback method recognizes all cash flows over a project's life. The discounted payback method recognizes all cash flows over a project's life, and it also adjusts these cash flows to account for the time value of money. The regular payback method was, years ago, widely used, but virtually no companies even calculate the payback today. The regular payback is useful as an indicator of a project's liquidity because it gives managers an idea of how long it will take to recover the funds invested in a project. The regular payback does not consider cash flows beyond the payback year, but the discounted payback overcomes this defect. Assume that you are on the financial staff of Vanderheiden Inc., and you have collected the following data: The yield on the company's outstanding bonds is 7.75%, its tax rate is 40%, the next expected dividend is $0.65 a share, the dividend is expected to grow at a constant rate of 6.00% a year, the price of the stock is $19.00 per share, the flotation cost for selling new shares is F = 10%, and the target capital structure is 45% debt and 55% common equity. What is the firm's WACC, assuming it must issue new stock to finance its capital budget? (Points : 0.83) 8.68% 7.93% 7.78% 8.76% 7.48% Question 17 of 30Daves Inc. recently hired you as a consultant to estimate the company's WACC. You have obtained the following information. (1) The firm's noncallable bonds mature in 20 years, have an 8.00% annual coupon, a par value of $1,000, and a market price of $1,075.00. (2) The company's tax rate is 40%. (3) The risk-free rate is 4.50%, the market risk premium is 5.50%, and the stock's beta is 1.20. (4) The target capital structure consists of 35% debt and the balance is common equity. The firm uses the CAPM to estimate the cost of equity, and it does not expect to issue any new common stock. What is its WACC? (Points : 0.83) 8.74% 8.13% 7.52% 9.18% 9.53% Question 18 of 30Assume a project has normal cash flows. All else equal, which of the following statements is CORRECT? (Points : 0.83) A project's IRR increases as the WACC declines. A project's NPV increases as the WACC declines. A project's MIRR is unaffected by changes in the WACC. A project's regular payback increases as the WACC declines. A project's discounted payback increases as the WACC declines. Stern Associates is considering a project that has the following cash flow data. What is the project's payback? Year 0 Cash flows -$750 (Points : 0.83) 2.17 years 2.49 years 1 $300 2 $310 3 $320 4 $330 5 $340 2.63 years 2.44 years 2.24 years Fernando Designs is considering a project that has the following cash flow and WACC data. What is the project's discounted payback? WACC: 10.00% Year 0 Cash flows -$1,000 (Points : 0.83) 2.80 years 1 $500 2 $500 3 $500 1.91 years 2.09 years 2.35 years 2.26 years Masulis Inc. is considering a project that has the following cash flow and WACC data. What is the project's discounted payback? WACC: Year Cash flows (Points : 0.83) 1.57 years 1.56 years 1.38 years 1.48 years 10.00% 0 -$700 1 $525 2 $485 3 $445 4 $405 1.54 years Barry Company is considering a project that has the following cash flow and WACC data. What is the project's NPV? Note that a project's projected NPV can be negative, in which case it will be rejected. WACC: Year Cash flows (Points : 0.83) 8.50% 0 -$1,100 1 $400 2 $390 3 $380 4 $370 5 $360 $403.86 $496.74 $319.05 $407.89 $488.66 Question 23 of 30Simms Corp. is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's projected IRR can be less than the WACC or negative, in both cases it will be rejected. Year 0 Cash flows -$1,400 (Points : 0.83) -4.04% -4.44% -5.67% -4.17% 1 $425 2 $425 3 $425 -4.53% Question 24 of 30Harry's Inc. is considering a project that has the following cash flow and WACC data. What is the project's NPV? Note that if a project's projected NPV is negative, it should be rejected. WACC: Year Cash flows (Points : 0.83) 14.50% 0 -$1,000 1 $300 2 $300 3 $300 4 $300 5 $300 $19.96 $20.85 $17.67 $20.67 $18.20 Question 25 of 30The cash flows associated with common stock are more difficult to estimate than those related to bonds because stock has a residual claim against the company versus a contractual obligation for a bond. (Points : 0.83) True False When a new issue of stock is brought to market, it is the marginal investor who determines True False Question 27 of 30The total return on a share of stock refers to the dividend yield less any commissions paid when the stock is purchased and sold. (Points : 0.83) True False Preferred stock is a hybrid--a sort of cross between a common stock and a bond--in the sense that it pays dividends that normally increase annually like a stock but its payments are contractually guaranteed like interest on a bond. (Points : 0.83) True False Question 29 of 30The cost of perpetual preferred stock is found as the preferred's annual dividend divided by the market price of the preferred stock. No adjustment is needed for taxes because preferred dividends, unlike interest on debt, are not deductible by the issuing firm. (Points : 0.83) True False 1.A share of common stock just paid a dividend of $1.00. If the expected long-run growth rate for this stock is 5.4%, and if investors' required rate of return is 13.9%, what is the stock price? (Points : 0.83) $11.04 $12.40 $13.76 $15.00 $9.42 2.Reddick Enterprises' stock currently sells for $40.50 per share. The dividend is projected to increase at a constant rate of 5.50% per year. The required rate of return on the stock is 9.00%. What is the stock's expected price 3 years from today? (Points : 0.83) $43.75 $58.02 $47.56 $53.74 $52.79 3.Schnusenberg Corporation just paid a dividend of $0.75 per share, and that dividend is expected to grow at a constant rate of 6.50% per year in the future. The company's beta is 1.65, the required return on the market is 10.50%, and the risk-free rate is 4.50%. What is the company's current stock price? (Points : 0.83) $10.92 $7.99 $9.30 $10.11 $10.41 The Ramirez Company's last dividend was $1.75. Its dividend growth rate is expected to be constant at 15% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its required return is 12%. What is the best estimate of the current stock price? (Points : 0.83) $42.76 $38.77 $36.24 $39.14 $36.60 The Isberg Company just paid a dividend of $0.75 per share, and that dividend is expected to grow at a constant rate of 5.50% per year in the future. The company's beta is 1.25, the market risk premium is 5.00%, and the risk-free rate is 4.00%. What is the company's current stock price, P? (Points : 0.83) $15.49 $16.66 $14.66 $19.32 $19.49 The Francis Company is expected to pay a dividend of D1 = $1.25 per share at the end of the year, and that dividend is expected to grow at a constant rate of 6.00% per year in the future. The company's beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 4.00%. What is the company's current stock price? (Points : 0.83) $22.83 $27.99 $27.17 $22.01 24.18 Gay Manufacturing is expected to pay a dividend of $1.25 per share at the end of the year. The stock sells for $21.50 per share, and its required rate of return is 10.5%. The dividend is expected to grow at some constant rate, g, forever. What is the equilibrium expected growth rate? (Points : 0.83) 4.87% 4.73% 5.34% 5.48% 4.69% Ackert Company's last dividend was $0.50. The dividend growth rate is expected to be constant at 1.5% for 2 years, after which dividends are expected to grow at a rate of 8.0% forever. The firm's required return (r) is 12.0%. What is the best estimate of the current stock price? (Points : 0.83) $10.28 $11.95 $10.04 $11.11 $13.98 Which of the following statements is CORRECT? (Points : 0.83) A major disadvantage of financing with preferred stock is that preferred stockholders typically have supernormal voting rights. Preferred stock is normally expected to provide steadier, more reliable income to investors than the same firm's common stock, and, as a result, the expected after-tax yield on the preferred is lower than the after-tax expected return on the common stock The preemptive right is a provision in all corporate charters that gives preferred stockholders the right to purchase (on a pro rata basis) new issues of preferred stock. One of the disadvantages to a corporation of owning preferred stock is that 70% of the dividends received represent taxable income to the corporate recipient, whereas interest income earned on bonds would be tax free. One of the advantages to financing with preferred stock is that 70% of the dividends paid out are tax deductible to the issuer. Two constant growth stocks are in equilibrium, have the same price, and have the same required rate of return. Which of the following statements is CORRECT? (Points : 0.83) The two stocks must have the same dividend per share. If one stock has a higher dividend yield, it must also have a lower dividend growth rate. If one stock has a higher dividend yield, it must also have a higher dividend growth rate. The two stocks must have the same dividend growth rate. The two stocks must have the same dividend yield. Which of the following statements is CORRECT? (Points : 0.83) A change in a company's target capital structure cannot affect its WACC. WACC calculations should be based on the before-tax costs of all the individual capital components. WACC. Flotation costs associated with issuing new common stock normally reduce the If a company's tax rate increases, then, all else equal, its weighted average cost of capital will decline. An increase in the risk-free rate will normally lower the marginal costs of both debt and equity financing. A company's perpetual preferred stock currently sells for $115.00 per share, and it pays an $8.00 annual dividend. If the company were to sell a new preferred issue, it would incur a flotation cost of 5.00% of the issue price. What is the firm's cost of preferred stock? (Points : 0.83) 7.32% 5.93% 6.08% 6.00% 7.18% O'Brien Inc. has the following data: rRF = 5.00%; RPM = 6.00%; and b = 1.10. What is the firm's cost of equity from retained earnings based on the CAPM? (Points : 0.83) 11.83% 13.22% 11.25% 8.93% 11.60% Several years ago the Jakob Company sold a $1,000 par value, noncallable bond that now has 20 years to maturity and a 7.00% annual coupon that is paid semiannually. The bond currently sells for $950, and the company's tax rate is 40%. What is the component cost of debt for use in the WACC calculation? (Points : 0.83) 4.81% 4.49% 4.31% 5.48% 5.30% Which of the following statements is CORRECT? (Points : 0.83) The regular payback method recognizes all cash flows over a project's life. The discounted payback method recognizes all cash flows over a project's life, and it also adjusts these cash flows to account for the time value of money. The regular payback method was, years ago, widely used, but virtually no companies even calculate the payback today. The regular payback is useful as an indicator of a project's liquidity because it gives managers an idea of how long it will take to recover the funds invested in a project. The regular payback does not consider cash flows beyond the payback year, but the discounted payback overcomes this defect. Assume that you are on the financial staff of Vanderheiden Inc., and you have collected the following data: The yield on the company's outstanding bonds is 7.75%, its tax rate is 40%, the next expected dividend is $0.65 a share, the dividend is expected to grow at a constant rate of 6.00% a year, the price of the stock is $19.00 per share, the flotation cost for selling new shares is F = 10%, and the target capital structure is 45% debt and 55% common equity. What is the firm's WACC, assuming it must issue new stock to finance its capital budget? (Points : 0.83) 8.68% 7.93% 7.78% 8.76% 7.48% Question 17 of 30Daves Inc. recently hired you as a consultant to estimate the company's WACC. You have obtained the following information. (1) The firm's noncallable bonds mature in 20 years, have an 8.00% annual coupon, a par value of $1,000, and a market price of $1,075.00. (2) The company's tax rate is 40%. (3) The risk-free rate is 4.50%, the market risk premium is 5.50%, and the stock's beta is 1.20. (4) The target capital structure consists of 35% debt and the balance is common equity. The firm uses the CAPM to estimate the cost of equity, and it does not expect to issue any new common stock. What is its WACC? (Points : 0.83) 8.74% 8.13% 7.52% 9.18% 9.53% Question 18 of 30Assume a project has normal cash flows. All else equal, which of the following statements is CORRECT? (Points : 0.83) A project's IRR increases as the WACC declines. A project's NPV increases as the WACC declines. A project's MIRR is unaffected by changes in the WACC. A project's regular payback increases as the WACC declines. A project's discounted payback increases as the WACC declines. Stern Associates is considering a project that has the following cash flow data. What is the project's payback? Year 0 1 2 3 4 5 Cash flows -$750 $300 $310 $320 $330 $340 (Points : 0.83) 2.17 years 2.49 years 2.63 years 2.44 years 2.24 years Fernando Designs is considering a project that has the following cash flow and WACC data. What is the project's discounted payback? WACC: Year Cash flows 10.00% 0 -$1,000 1 $500 2 $500 3 $500 (Points : 0.83) 2.80 years 1.91 years 2.09 years 2.35 years 2.26 years Masulis Inc. is considering a project that has the following cash flow and WACC data. What is the project's discounted payback? WACC: Year Cash flows (Points : 0.83) 1.57 years 1.56 years 1.38 years 1.48 years 1.54 years 10.00% 0 -$700 1 $525 2 $485 3 $445 4 $405 Barry Company is considering a project that has the following cash flow and WACC data. What is the project's NPV? Note that a project's projected NPV can be negative, in which case it will be rejected. WACC: Year Cash flows 8.50% 0 -$1,100 1 $400 2 $390 3 $380 4 $370 5 $360 (Points : 0.83) $403.86 $496.74 $319.05 $407.89 $488.66 Question 23 of 30Simms Corp. is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's projected IRR can be less than the WACC or negative, in both cases it will be rejected. Year Cash flows 0 -$1,400 1 $425 2 $425 3 $425 (Points : 0.83) -4.04% -4.44% -5.67% -4.17% -4.53% Question 24 of 30Harry's Inc. is considering a project that has the following cash flow and WACC data. What is the project's NPV? Note that if a project's projected NPV is negative, it should be rejected. WACC: Year Cash flows 14.50% 0 -$1,000 1 $300 2 $300 3 $300 4 $300 5 $300 (Points : 0.83) $19.96 $20.85 $17.67 $20.67 $18.20 Question 25 of 30The cash flows associated with common stock are more difficult to estimate than those related to bonds because stock has a residual claim against the company versus a contractual obligation for a bond. (Points : 0.83) True False When a new issue of stock is brought to market, it is the marginal investor who determines the price at which the stock will trade. (Points : 0.83) True False Question 27 of 30The total return on a share of stock refers to the dividend yield less any commissions paid when the stock is purchased and sold. (Points : 0.83) True False Preferred stock is a hybrid--a sort of cross between a common stock and a bond--in the sense that it pays dividends that normally increase annually like a stock but its payments are contractually guaranteed like interest on a bond. (Points : 0.83) True False Question 29 of 30The cost of perpetual preferred stock is found as the preferred's annual dividend divided by the market price of the preferred stock. No adjustment is needed for taxes because preferred dividends, unlike interest on debt, are not deductible by the issuing firm. (Points : 0.83) True False