Help Save & Exit Submit The Electric Company is growing quickly, with current annual increases of 20% per year in both sales and net income. To fund its growth, it is reinvesting all of its net income each year in new productive opportunities (payout ratio = 0). Yesterday, the firm reported net income of $2.00 per share. This growth is expected to last for another five years (to the end of year 5 on the timeline), at which time they will have exploited most of the available high growth opportunities. The growth rate in net income will then fall to 5% and the firm will adopt a payout ratio of 50% with the first dividend paid at time period 6. If shareholders require a 15% return to hold the firm's shares, how much would you expect each share to sell for today? Multiple Choice $15.87 $26.20 $12.98 Nexting Pray 11 of 50 de ENG Help Save & Exit Submit According to the Fisher Equation given an expected inflation rate of 2.5% and a nominal interest rate of 4.5%, the approximate real interest rate is: Multiple Choice 2.50% 1.75% 2.25% 2.0% 10 of 50 Next > We know that the Yield-to-Maturity can always be decomposed into a Coupon Yield (Coupon/PO) plus a capital gain or loss component Assume that we are referring to the 2.75% coupon, 50-year bond issued by Canada April 28th, 2014. Assume that it is now April 28th, 2024 and the current yield on this bond is 6%. What is the annual Coupon Yield on this bond? Multiple Choice 6.0% 5.40% 6.5% 7.09 9 of 50 Next >