Nicks Enchiladas Incorporated has preferred stock outstanding that pays a dividend of $15 at the end of each year. The preferred sells for $85 a share. What is the stocks required rate of return?

		15.00%
		5.88%
		30.00%
		17.65%
		10.00%

You are analyzing Jillians Jewlery (JJ) stock for a possible purchase. JJ just paid a dividend of $2.25 yesterday. You expect the dividend to grow at the rate of 5% per year for the next 3 years; if you buy the stock, you plan to hold it for 3 years and then sell it.

JJ stock should trade for $25.00 3 years from now (i.e., you expect P3^ = $25.00). Discounted at a 10% rate, what is the present value of this expected future stock price? In other words, calculate the PV of $25.00.

$20.66

$27.05

$18.75

$25.00

$12.5 0

You are analyzing Jillians Jewlery (JJ) stock for a possible purchase. JJ just paid a dividend of $2.25 yesterday. You expect the dividend to grow at the rate of 5% per year for the next 3 years; if you buy the stock, you plan to hold it for 3 years and then sell it.

If you plan to buy the stock, hold it for 3 years, and then sell it for $25.00, what is the most you should pay for it? Assume a cost of capital of 10%.

		$20.74
		$25.00
		$24.94
		$27.05
		$22.71

Dozier Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFs) during the next 3 years, after which FCF is expected to grow at a constant 5% rate. Doziers weighted average cost of capital is WACC = 12%. What is the current value of operations for Dozier?

Year	1	2	3
Free cash flow ($ millions)	($10)	$25	$50

		$800.00
		$527.89
		$750.00
		$580.43
		$713.33

You are analyzing Jillians Jewlery (JJ) stock for a possible purchase. JJ just paid a dividend of $1.50 yesterday. You expect the dividend to grow at the rate of 6% per year for the next 3 years; if you buy the stock, you plan to hold it for 3 years and then sell it.

JJs stock has a required return of 13% and so this is the rate youll use to discount dividends. Find the present value of the dividend stream; that is, calculate the PV of D1, D2, and D3, and then sum these PVs.

		$5.11
		$2.38
		$3.97
		$5.06
		$6.75