Number 1: Tucker Corporation's manager believes that the economic environment during the next year can be good, normal, or bad, and he thinks that a stock's returns will have the following probability distribution shown below.

Good.3015%

Normal.600%

Bad.10-5%

Calculate the coefficient of variations

Number 2:

Statement 1. Miller and Modigliani proposed that investors prefer dividends to capital gains because dividends are more certain than capital gains. The principle is called the "bird-in-the-hand" effect.

Statement 2. One important advantage of using the residual dividend model is that it enables a company to follow a stable dividend policy.

Number 3.

Kale Inc. forecasts the free cash flows to the firm (in millions) shown below. If the weighted average cost of capital is 11.0%, cost of equity is 16%, and FCF to the Firm is expected to grow at a rate of 5.0% after Year 2, what is the firm's total corporate value, in millions?

.

Year12

Free cash flow-P30P130