dorescantina Puconn.edu - University of Connecticut ad Open with Google Docs 13. The preferred stock for LCS pays a dividend of $2.25 every year. If the price of the stock is $48, what is the required rate of return for this stock? a. 4.43% b. 4.69% C. 4.82% d. 5.07% 14. Dominion, Inc. plans to issue new stock at $50 per share. The underwriter charges 10% on the new issues' PPS. The last dividend paid was $2 with an annual growth rate of 3%. What is the cost of new common stock? a. 7.58% b. 9.65% C 10.43% d. 12.92% The following information pertains to the next 4 questions. Assume that the risk-adjusted cost of capital is 7%. Year 0 1 2 3 4 Proj. A CFS -400 100 100 100 200 Pro. B CES -300 50 50 50 200 15. What is the NPV of Project A? a. $10.53 b. $13.19 C. $15.01 d. $17.36 16. What is the IRR of Project B? a. 5.08% b. 5.66% C. 6.23% d. 6.95% 17. Using the discounted payback as the criterion, which project is better? a. Project A b. Project B C. They are the same d. It is impossible to tell with the information given 18. What is the crossover rate for the two projects (the discount rate for which both projects have the same NPV)? a. 5.36% b. 10.95% C. 16.07% d. 23.38%