QUESTION 1

1. ABC's last dividend was $3.1.The dividend growth rate is expected to be constant at 20% for 3 years, after which dividends are expected to grow at a rate of 5% forever.If the firm's required return (rs) is 16%, what is its current stock price (i.e. solve for Po)?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

QUESTION 2

1. ABC Company's last dividend was $0.7.The dividend growth rate is expected to be constant at 30% for 2 years, after which dividends are expected to grow at a rate of 6% forever.The firm's required return (rs) is 16%.What is its current stock price (i.e. solve for Po)?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

QUESTION 3

1. A stock is expected to pay a dividend of $1.6 at the end of the year.The required rate of return is rs = 19.1%, and the expected constant growth rate is g = 6%.What is the stock's current price?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

QUESTION 4

1. ABC's stock has a required rate of return of 18.4%, and it sells for $69 per share.The dividend is expected to grow at a constant rate of 6.2% per year.What is the expected year-end dividend, D1?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

QUESTION 5

1. If D0 = $2.8, g = 3.2%, and P0 = $79.4, what is the required rate of return on the stock? That is, solve for r.

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

QUESTION 6

1. ABC just paid a dividend of D0 = $4.9.Analysts expect the company's dividend to grow by 30% this year, by 22% in Year 2, and at a constant rate of 5% in Year 3 and thereafter.The required return on this stock is 12%.What is the best estimate of the stock's current market value?

2. Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

QUESTION 7

1. ABC is expected to pay a dividend of $1.6 per share at the end of the year.The stock sells for $54 per share, and its required rate of return is 17.5%.The dividend is expected to grow at some constant rate, g, forever.What is the growth rate (i.e. solve for g)?

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

QUESTION 8

1. ABC Enterprises' stock is expected to pay a dividend of $1.2 per share.The dividend is projected to increase at a constant rate of 3.2% per year.The required rate of return on the stock is 12.7%.What is the stock's expected price 3 years from today (i.e. solve for P3)?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

QUESTION 9

1. A stock just paid a dividend of D0 = $1.8.The required rate of return is rs = 16.1%, and the constant growth rate is g = 6.8%.What is the current stock price?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

QUESTION 10

1. ABC Inc., is expected to pay an annual dividend of $2.9 per share next year. The required return is 12 percent and the growth rate is 8 percent. What is the expected value of this stock five years from now?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

QUESTION 11

1. If D1 = $3.17 and P0 = $43.61, what is the dividend yield?

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

QUESTION 12

1. ABC's last dividend paid was $2, its required return is 17.4%, its growth rate is 5.2%, and its growth rate is expected to be constant in the future.What is Sorenson's expected stock price in 7 years, i.e., what is P7?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

QUESTION 13

1. ABC Enterprises' stock is currently selling for $59.6 per share.The dividend is projected to increase at a constant rate of 7.9% per year.The required rate of return on the stock is 12%.What is the stock's expected price 5 years from today (i.e. solve for P5)?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

QUESTION 14

1. The common stock of Wetmore Industries is valued at $77.1 a share. The company increases their dividend by 7.2 percent annually and expects their next dividend to be $5.4. What is the required rate of return on this stock? That is, solve for r.

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

QUESTION 15

1. If D1 = $6.9, g (which is constant) = 3.1%, and P0 = $69.7, what is the required rate of return on the stock? That is, solve for r.

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

QUESTION 16

1. The common stock of ABC Industries is valued at $96.3 a share. The company increases their dividend by 2.3 percent annually and expects their next dividend to be $6. What is the required rate of return on this stock? That is, solve for r.