(Estimated time allowance: 8 minutes) Cero Inc. has not paid dividends on its stock for the past 5 years and no dividends will be paid over the next 9 years, because the firm needs to plow back its earnings to fuel growth. The company will then pay a $20 per share dividend at the end of year 10 and thereafter it will increase the dividends by 2% per year forever. If the required rate of return on this stock is 10%, what is the current (today's) share price? Do not use the $ sien. Use commas to separate thousands. DO NOT USE decimals. Round to the nearest DOLLAR. For example if you obtain $1,432.728 then enter 1,433 or if you obtain $1.120.1321 then enter 1,120 A/ (Estimated time allowance: 6 minutes) BCG Inc. has a current annual cash dividend policy of $3. The price of the stock is set to yield 6% return. What is the price of this stock today if the dividend will be paid for 6 year? Show your answer to the nearest 2 decimals. Do not use the $ sign in your answer. For example, if the answer is $3.237 enter your answer as 3.24 Do not enter it as $3.237, $3.2, 3.2, or 3.237 Your Answer: Answer (Estimated time allowance: 12 minutes) Use the information below. All projects (A to G) are 7-year projects. NPV = Net present value. IRR = internal rate of return. MIRR = modified internal rate of return. Pl = profitability index. Criteria: Project A Project_B Project C Project D Project E Project_F Project G NPV- $137,083 $31,290 $6,016 $7,647 ($584) $12,521 $9,214 IRR 31.80% 48.34% 12.03% 11.30% 9.94% 26.79% 37.87% MIRR- 18.52% 23.52% 10.62% 10.59% 9.97% 23.53% 20.76% PIE 1.69 2.25 1.040 1.038 1.00 2.25 1.92 The discounting rate (r) is 10%. Which of the following 6 statements are true (there are several, select all that are correct). Consider each statement on its own separate from the others listed: 1) If projects A & B are mutually exclusive, exclusive and projects Fand G are also mutually exclusive (all others are independent), under the IRR rule projects A, D, and F should be undertaken 2) If all projects are mutually exclusive, under the NPV rule only project A should be taken 3) If projects A & B are mutually exclusive, projects C and D are also mutually exclusive and projects Fand G are also mutually exclusive (all others are independent), under the IRR rule projects B, C, and G should be undertaken 4) If all projects are independent, under the NPV rule, all projects should be taken 5) If only projects E and Fare mutually exclusive, under the NPV rule only project A should be taken 6) If projects A & B are mutually exclusive, projects C and D are also mutually exclusive and projects F and G are also mutually exclusive (all others are independent), under the NPV rule projects A, D, and F should be undertaken
