Question 1 A stock has the following characteristics. What should the current share price be? Dividends year 1: 2.0 Dividends year 2: 3.0 Dividends year 3: 3.9 Dividends year 4: 4.5 Dividends year 5: 5.0 Long-term growth rate starting year 5: 5% Discount rate: 15% $36.7 $37.7 $54.4 $55.2 Based on the npv rule, you should invest in a project with an npv of -1,254. True False Question 3 If at the beginning of a period, you buy a share of stock for $49, then receive a dividend of $3, and finally sell the stock for $51, what was your holding period return? 9.3% 10.2% 14.8% 16.3% Question 4 For a company with the characteristics below, what would you expect the sustainable growth rate, g, to be? net income/share = $13.6 return on equity = 12.4% payout ratio = 39.9% plowback ratio = 60.1% 1.7 5.4 7.5 8.2