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Question 2 (1 point) If the constant dividend growth rate of a stock exceeds its required rate of return, then we cannot use the dividend-growth-model (=dividend discount model) to value this stock Question 2 options: 1) True 2) False Save Question 3 (1 point) Use the following information to answer questions 3-6: You know the following data for normal project A: Normal Payback = 4 years; IRR = 12%; NPV = -20 if discounted at 14%. If the discount rate of project A was 16%, then the normal Pay Back of project A would be Question 3 options: less than 4 years the same, i.e., 4 years more than 4 years Save Question 4 (1 point) At a discount rate of 14% the discounted Payback of project A would be Question 4 options: less than 4 years the same, i.e., 4 years more than 4 years Save Question 5 (1 point) If the cash flows of project A were discounted at 10%, then the NPV of project A would be Question 5 options: negative zero positive Save Question 6 (1 point) If the cash flows of project A were discounted at 12%, then the NPV of project A would be Question 6 options: negative zero positive Save Question 7 (2 points) One year ago you have purchased a $1,000 par value bond with a remaining time to maturity of 16 years and a semiannual coupon of 6%. The price of the bond at the time of purchase was 97%. Therefore the yield to maturity of this bond at the time of purchase was ...... and the current yield of this bond at the time of purchase was ....... Question 7 options: 6%; =6% 6% >6%; >6% =6%; =6% >6%; 6% >6%; =6% =6%; =6% 6%; >6% >6%;Step by Step Solution
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