Outlook 2:05 PM more @ 60% 28. Given the following information, calculate the price paid for this common stock: Expected growth rate 4% Dividend at to $2.50 Required rate of return = 7% a. $83.33 b. $22.73 c. $8.33 d. $86.67 29. The value of a business depends on future cash flows. This value is affected by: a. the size of the cash flows b. the timing of the cash flows c. the riskiness of the cash flows d. all of the above 30. Which of the following is (are) true? a. If the yield to maturity is greater than the coupon rate, the bond will sell at a premium b. If the yield to maturity is less than the coupon rate, the bond will sell at a premium. c. Market prices and interest rates are positively correlated. d. all of the above 31. A problem associated with the payback method is: a. it usually requires less time to compute than that required by the net present value method b. it doesn't consider cash flows after the payback period c. it assumes that all cash flows are invested at the cost of capital d. it uses the time value of money concept 32. Calculate the payback period for the following investment: A machine costs $100,000 with installation costs of $15,000. Cash inflows are expected to be 26,000 per year for the next seven years. a greater than 6 years b. 3.85 years