coroporate finance

Choose the best choice that suits your answer. 1. YMC Corp. has a beta of 1.75 and is currently in equilibrium. The required rate of return on the stock is 15.5% versus a required return on an average stock of 11%. Now the required return on an average stock decreases to 8%. Neither betas nor the risk-free rate change. Then TMC's new required return will approximately be? OA) 10.25% O B) 11.3% O C) 12.50% OD) 18.5% O E) None of the above 2) GM paid a dividend of $1.25 a share last week. The company is planning on paying $2.75, $3.75. and $4.85 a share over the next 3 years, respectively. After that, the dividend will be constant at $5 per share per year. What is the approximate market price of this stock if the required rate of return is 12 percent? A) $53.01 B) $39.8 C) $37.37 OD) $38.55 E) None of the above 4. Ricardo Industries just paid a dividend of DO = $1.35. Analysts expect the company's dividend to grow by 20% this year, by 15% in Year 2, and at a constant rate of 7% in Year 3 and thereafter. The required return on this low-risk stock is 9%. What is the best estimate of the stock's current market value? choose the nearest choice OA) $77.3 O B) $83.9 O C) $869 OD) $88.3 OE) None of the above 3. Miracle Inc. issued perpetual preferred stock with a 8.5% annual dividend. The stock currently yields 9%, and its par value is $100. Suppose interest rates decrease and drops the preferred stock's yield down to 6%. How much approximately would its market value change? O A) $27.86 OB) S(35.29) OC) ($27.86) OD) $47.22 O E) None of the above