Greshak Corp.'s common stock currently trades for $75.00 and is projected to pay a dividend of $5.00 per share next year. Assuming that Greshak's average historical return on equity is 10.0%, the risk free rate is 4.0% and the constant growth rate for the company is projected to be 6.0%, what is the market's required rate of return on the company's common stock (rounded)?

Select one:

a. 9.6%

b. 10.0%

c. 12.7%

d. 13.1%

e. 13.6%

The value of common stock can be viewed as ________.

Select one:

a. a dividend stream, plus a market price at the end of the dividend stream.

b. a present value of a dividend stream, plus a market price at the end of the dividend stream.

c. the terminal value of the dividend stream.

d. the sum of the dividend stream, taken to infinity.

e. the value of the firm's debt times its debt-to-equity ratio.