Question $1$:

A company's stock is currently selling for $$40$ per share. The company is expected to pay a dividend of $$1\mathrm{.}60$ per share next year, and dividends are expected to grow at a constant rate of $4\%$ per year. What is the required rate of return on the company's stock?

A$)8\%$

B$)10\%$

C$)12\%$

D$)14\%$ Question $2$:

A bond with a face value of $$1,000$ has a coupon rate of $7\%$ and matures in $15$ years. The bond pays interest annually. If the required rate of return is $8\%,$ what is the present value of the bond?

A$)$ $$887\mathrm{.}00$

B$)$ $$920\mathrm{.}15$

C$)$ $$950\mathrm{.}32$

D$)$ $$980\mathrm{.}50$ Question $3$:

A project requires an initial investment of $$200,000$ and is expected to generate cash flows of $$50,000$ per year for $6$ years. If the company's cost of capital is $10\%,$ what is the Net Present Value $($NPV$)$ of the project?

A$)$ $$30,000$

B$)$ $$25,000$

C$)$ $$20,000$

D$)$ $$15,000$