I need help with answering number 18
) Rylan Industries is expected to pay a dividend of $5.40 vear for the next four years. If the current price of Rylan stock is $32.16, and Rylan's equity cost of capital is 14%, what price would you expect Rylan's stock to sell for at the end of the four years? B-2 A) $22.19 11) B) $77.67 12) Gremlin Industries will pay a dividend of S1.80 per share this year, It is expected that this dividend C) $27,74 D) S49.93 will grow by 7% per year each year in the future, The current price of Gremlin's stock is $22.30 per share. What is Gremlin's equity cost of capital? A) 19% 12) B) 14% C) 17% 13) A company has stock which costs $44,00 per share and pays a dividend of $2.80 per share this year. The company's cost of equity is 8%. What is the expected annual growth rate of the company's dividends? D) 15% A) 3.28% 13) B) 4.92% C) 1.64% 14, Two mutually exclusive investment opportunities require an initial investment of $8 million. Investment A pays $1.9 million per vear in perpetuity, while investment B pays $1.3 million in the first year, with cash flows increasing by 4% per vear after that. At what cost of capital would an investor regard both opportunities as being equivalent? A) 14% D) 6.56% 14) B) 13% C) 3% D) 6% 15 Chittenden Enterprises has 626 million shares outstanding. It expects earnings at the end of the year to be $980 million. The firm's equity ost of capital is 10%. Chittenden pays out 30% of its earnings in total: 20% paid out as dividends and 10% used to repurchase shares. If Chittenden's earnings are expected to grow at a constant 4% per year, what is Chittenden's share price? A) $3.92 15) B) $7.83 C) $15.66 D) S2.35 16; What is the internal rate of return (IRR) of an investment that requires an initial investment of S9000 today and pays $12,870 in one year's time? A) 40% g) 16) B) 43% C) 46% D) 47% 17) Consider the following two projects: 17) Project Year 0 Year 1 Year 2 Cash Flow CashFlow Cash Flow Cash Flow Cash Flow Year 3 Y 4 Discount Rate 40 30 50 30 A - 100 0,15 60 N/A 0.15 - 73 B 30 30 The payback period for project B is closest to A) 2.7 years D) 2.4 years C) 1.9 years B) 2.2 years 18) A delivery service is buying 600 tires for its fleet of vehicles. One supplier offers to supply the tires for $85 per tire, payable in one year. Another supplier will supply the tires for $15,000 down today, then $45 per tire, payable in one year. What is the difference in PV between the first and the second offer assuming interest rates are 7.9%? A) $2897 18) D) -$10,864 C) $10,864 B) $7243 19) A company buys a color printer that will cost $20,000 to buy, and last 5 years. It is assumed that it will require servicing costing $500 each year. What is the equivalent annual annuity of this deal, given a cost of capital of 12%? A) -$6048 19) D) -$4234 C) -$5443 B) -$4839 0, a YTM of 0, a YTM of 32 O.YIM of 4.8%, an ten- year, $10,000 bond with trasting for a price of 502079 3.249 00 bud with a 58% coop B1 3960.82 nd semiar
