Initial Public Offering (IPO) market is the market for stocks of companies that are in the process of going public.

Question 16 options:

	True
	False

Which of the following statements is correct?

Question 14 options:

	Google's Class B stock was sold to the investing public while its Class A stock was retained by its founders.
	Like bonds, preferred stock has a par value and a fixed amount of dividends which must be paid before dividends can be paid on the common stock.
	Two firms with the same dividend and growth rate must also have the same stock price.
	It is appropriate to use the constant growth model to estimate stock value even if the growth rate never becomes constant.

Thames Inc.'s most recent dividend was $2.5 per share (D₀ = $2.5). The dividend is expected to grow at a rate of 4% per year. The risk-free rate is 3% and the return on the market is 9%. The company's beta is 1.5 (beta = 1.5). What is the required rate of return on the stock (k_s)? What is the price of the stock today (P₀)?

Question 18 options:

	The required rate of return on the stock (ks) is 13.5% and the price of the stock today (P0) is $27.37
	The required rate of return on the stock (ks) is 13.5% and the price of the stock today (P0) is $26.32
	The required rate of return on the stock (ks) is 12% and the price of the stock today (P0) is $32.5
	The required rate of return on the stock (ks) is 12% and the price of the stock today (P0) is $16.25
	The required rate of return on the stock (ks) is 12% and the price of the stock today (P0) is $31.25