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80px a Dell Bar Links Di Bing Current price=$4, price in year 4=$5.05 Current price=$50.5. price in year 4=$40 Suppose a firm is expected to increase dividends by 20% in one year and by 15% in two years. After t hat, dividends will increase at a rate of 5% per year indefinitely. If the last dividend was $1 and the req uired return is 20%, what is the price of the stock? $1.449 $9.66 $1.38 S8 67 Suppose a company had earnings per share of $5 over the past year. The industry average PE ratio is 12. Use this information to value this company's stock price. S17 None of the above is correct $60 $7 Which of the following statement is correct? Dividend payments are considered as business expense, therefore, they are tax deductible Common stock holders have the priority to claim for dividends Preferred stock holders have the same voting right as common stockholders Stated dividends must be paid to preferred stockholders before dividends can be paid to common stockh olders Suppose you have predicted the following returns for stocks C and Tin three possible states of the e conomy. What are the expected returns? hetoni Boom 03 DS S 012 M aspe Dell Links Bing * Suppose you have predicted the following returns for stocks Cand Tin three possible states of the e conomy. What are the expected returns? State Probability TE Boom 0.3 019 02 Noma 03 0,10 Rocoon 323 0.02 020 RC=99%, RT = 1779 RC=15%, RT = 25% RC=25%, RT = 15% RC=177%. RT - 9.9% 495 Boom Suppose you have predicted the following returns for stocks C and Tin three possible states of the e conomy sfate Probe 02 0:15 0.25 Noma 0.5 0.10 120 ocoon 292 0.02 0.01 What are the variance and standard deviation for each stock? A For stock C..2=0.2%, For stock T 0 = 0.74% B. For stock C, 2=0 749 For stock T = 0.2% C. For stock C, 02-0.2%, For stock T. D = 8.63% D. For stock C 02-8.63% For stock T = 4.5% Consider the portfolio welghts as followed. C: 0.133 KO: 0.2 INTC: 0.267 BP: 0.4. If the individual stocks have the following expected returns, what is the expected return for the portfol lo? C: 19.69% KO: 5.25% INTC: 16.65% BP: 18.24% E(RP)=25% DIORGIO 6 M * aspx Dell Da Links Di Bing C. For stock C, D2=0,2% For stock = 8.63% D. For stock C, 32=8.63%. For stock T. D = 45% Consider the portfolio weights as followed. C: 0.133 KO: 0.2 INTC: 0.267 BP: 0.4. If the individual stocks have the following expected returns, what is the expected return for the portfol io? C: 19.69% KO: 5.25% INTC: 16,65% BP: 18.24% 496 EE(RP=25% E(RP)=15.41% E(RP)=16.419 E(RP=14.96% Consider the following information on returns and probabilities: Tavest 50% of your money in Asset A. Stute. Probability A Portfolio Boom .4 30% -5% 12.5% Bust 6 -10% 25% 7.5% What are the expected return and standard deviation for the portfolio? Expected return of portfolio=13%, standard deviation of the portfolio=14.7% Expected return of portfolio=9.5%, standard deviation of the portfolio=2.45% Expected return of portfolio=12 5%, standard deviation of the portfolio 6% Expected return of portfolio=6%, standard deviation of the portfolio=19.6% Consider the following information: Stuadard Deviation Beta Security 20% 1.25 BELLE dx 80px a Dell Bar Links Di Bing Current price=$4, price in year 4=$5.05 Current price=$50.5. price in year 4=$40 Suppose a firm is expected to increase dividends by 20% in one year and by 15% in two years. After t hat, dividends will increase at a rate of 5% per year indefinitely. If the last dividend was $1 and the req uired return is 20%, what is the price of the stock? $1.449 $9.66 $1.38 S8 67 Suppose a company had earnings per share of $5 over the past year. The industry average PE ratio is 12. Use this information to value this company's stock price. S17 None of the above is correct $60 $7 Which of the following statement is correct? Dividend payments are considered as business expense, therefore, they are tax deductible Common stock holders have the priority to claim for dividends Preferred stock holders have the same voting right as common stockholders Stated dividends must be paid to preferred stockholders before dividends can be paid to common stockh olders Suppose you have predicted the following returns for stocks C and Tin three possible states of the e conomy. What are the expected returns? hetoni Boom 03 DS S 012 M aspe Dell Links Bing * Suppose you have predicted the following returns for stocks Cand Tin three possible states of the e conomy. What are the expected returns? State Probability TE Boom 0.3 019 02 Noma 03 0,10 Rocoon 323 0.02 020 RC=99%, RT = 1779 RC=15%, RT = 25% RC=25%, RT = 15% RC=177%. RT - 9.9% 495 Boom Suppose you have predicted the following returns for stocks C and Tin three possible states of the e conomy sfate Probe 02 0:15 0.25 Noma 0.5 0.10 120 ocoon 292 0.02 0.01 What are the variance and standard deviation for each stock? A For stock C..2=0.2%, For stock T 0 = 0.74% B. For stock C, 2=0 749 For stock T = 0.2% C. For stock C, 02-0.2%, For stock T. D = 8.63% D. For stock C 02-8.63% For stock T = 4.5% Consider the portfolio welghts as followed. C: 0.133 KO: 0.2 INTC: 0.267 BP: 0.4. If the individual stocks have the following expected returns, what is the expected return for the portfol lo? C: 19.69% KO: 5.25% INTC: 16.65% BP: 18.24% E(RP)=25% DIORGIO 6 M * aspx Dell Da Links Di Bing C. For stock C, D2=0,2% For stock = 8.63% D. For stock C, 32=8.63%. For stock T. D = 45% Consider the portfolio weights as followed. C: 0.133 KO: 0.2 INTC: 0.267 BP: 0.4. If the individual stocks have the following expected returns, what is the expected return for the portfol io? C: 19.69% KO: 5.25% INTC: 16,65% BP: 18.24% 496 EE(RP=25% E(RP)=15.41% E(RP)=16.419 E(RP=14.96% Consider the following information on returns and probabilities: Tavest 50% of your money in Asset A. Stute. Probability A Portfolio Boom .4 30% -5% 12.5% Bust 6 -10% 25% 7.5% What are the expected return and standard deviation for the portfolio? Expected return of portfolio=13%, standard deviation of the portfolio=14.7% Expected return of portfolio=9.5%, standard deviation of the portfolio=2.45% Expected return of portfolio=12 5%, standard deviation of the portfolio 6% Expected return of portfolio=6%, standard deviation of the portfolio=19.6% Consider the following information: Stuadard Deviation Beta Security 20% 1.25 BELLE dx