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Francis Inc.'s stock has a required rate of return of 10.5%, and it sells for $57.50 per share. The dividend is expected to grow at a constant rate of 6.00% per year. What is the expected year-end dividend. D_1? a. $2.20 b. $2.42 c. $2.59 d. $2.96 e. $3.25 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 1.15, the market risk premium is 5.00%, and the risk-free rate is 4.00%. What is the company's current stock price. P_6? a. $18.62 b. $19.08 c. $19.56 d. $20.05 e. $20.55 Which of the following statements is CORRECT? a. An option's value is determined by its exercise value, which is the market price of the stock less its strike price. Thus, an option can't sell for more than its exercise value. b. As a stock's price increases, the premium portion of an option on that stock increases because the difference between the stock price and the fixed strike price increases. c. The number value of an option depends in part on the option's length of time until expiration and on the variability of the underlying stock's price. d. If the company is consistently profitable, its call options will always be in the money. e. None of the above statements are correct. A 6-month put option on Smith Corp.'s stock has a strike price of $45 and sells in the number for $8.90. Smith's current stock price is $40. What is the option premium? a. $3.90 b. $4.90 c. $5.39 d. $5.93 e. $6.52