Q1: Choose from options

3points)-Your common stock just paid $2 per share of annual dividend, you think the dividend will increase at the rate of 5% per year for two years, and you forecast that your stock can be sold at $20 per share two years from now. Your required rate of return on the common stock is 12%. Your valuation of the stock today should be __.

Group of answer choices

$17.87

$19.40

$19.58

$21.58

25 points)-XYZ stocks market value today should be ___ per share.

Group of answer choices

$24.854

$25

$27

$27.938

24points)-XYZ stocks market value at the end of the second year should be ___ per share.

Group of answer choices

$22.491

$25

$27.563

$28.114 23points)-Investors required rate of return on the XYZ stock should be __.

Group of answer choices

3%

7%

8%

10% : 12points)-Which one of the followings violates the risk diversification rule in personal investment?

Group of answer choices

An employee of a public company should invest less in his/her companys stock than a nonemployee.

A stock broker should invest less in stocks and more in other asset classes such as bonds, commodities, etc.

A young investor with stable job should invest more aggressively (i.e., investing more in high-risk assets such as stocks and less in low-risk assets such as bonds).

As an investor with stable job grows older, he/she needs to be more aggressive in his/her financial portfolio by tilting more toward high-risk assets such as stocks.