QUESTION 1

1. ABC stock just paid dividend $1.94 (D₀) per share, and future dividends are expected to grow at a constant rate of 4.2% every year. The required return for the ABC stock is 10.39%.

   What is current market price of ABC stock?

   Please round your answer to the second decimal without dollar sign. E.g. 1.23

QUESTION 2

1. Which of the following statements concerning preferred stock is CORRECT?

   	A.	Preferred stockholders can sue to company if the company doesnt pay them the pre-specified dividend amounts.
   	B.	Most issues of preferred stock have a cumulative feature.
   	C.	Preferred dividends payments are tax-deductible for firms.
   	D.	Preferred stock is a riskier form of capital to the firm than common stock.

QUESTION 3

1. A stock is expected to pay $3.34 per year in dividends in the foreseeable future. Assume an existing stockholder expects to sell the stock for $41.84 in two years and requires 10.96% annual return on this stock investment.

   What is the intrinsic value of this stock?

   Please round your answer to the second decimal without dollar sign. For example, 1.12.

QUESTION 4

1. Sine Corp. stock sells for $94.88 and currently pays an annual dividend of $1.28 per share. Calculate analyst projected price one year from today if the expected one-year return is currently 19.52%

   Please round your answer to the second decimal without dollar sign. E.g. 1.23

QUESTION 5

1. Common stockholders are essentially:

   	A.	owners of the firm.
   	B.	managers of the firm.
   	C.	creditors of the firm.
   	D.	employees of the firms.