Question 1

If the current dividend (D₀) is $2 is expected to grow at 8% per year then what is the expected dividend per share is 3 years?

	$2.16
	$2.52

	$1.26
	$6.48

Question 2

Mathias Brothers is expected to pay a $0.25 per share dividend at the end of the year (D₁ = $0.25). The dividend is expected to grow at a constant rate of 6% per year and the required rate of return on the stock is 14%. What is the stocks intrinsic value?

	$3.13
	$4.17

	$3.32
	$4.42

Question 3

Soul Enterprises recently paid a dividend, D₀, of $1. It expects to have non constant growth of 10% for 3 years followed by a constant rate of 6% thereafter. The firms required rate of return is 11%. What is the horizon value at the end of year 3?

	$1.33
	$23.58

	$26.62
	$28.22

Question 4

Soul Enterprises recently paid a dividend, D₀, of $1. It expects to have non constant growth of 10% for 3 years followed by a constant rate of 6% thereafter. The firms required rate of return is 11%. What is the intrinsic value of the stock today?

	$28.22
	$1.33

	$23.58
	$26.62

Question 5

Wesson Technologies is expected to generate $100 million in FCF next year and FCF is expected to grow at a constant rate of 4% per year. Wesson has $200 million in debt, no preferred stock, and its WACC is 12%. If Wesson has 40 million shares of stock outstanding, what is the stocks value per share?

	$26.25
	$27.50

	$32.50
	$31.25

Question 6

Hazel Corporation issued perpetual preferred stock with a par value of $100. The stock pays a a 8% annual dividend. If the required rate of return for preferred stock is 11% then what is the stocks value?

	$981.82
	$137.50

	$72.73
	$266.67

Question 7

Jordan Mining ore reserves are being depleted, its sales are falling, and its costs are rising. The companys earnings and dividends are declining at the constant rate of 3% per year. If the current dividend (D₀) is $2 and the required rate of return is 12%, what is the value of Jordans stock?

	$13.33
	$12.93

	$11.73
	$22.89

Question 8

Which of the following is true for a constant growth stock?

	As the growth rate increases the intrinsic value increases as long as the required rate of return is greater than the growth rate.
	As the growth rate decreases the intrinsic value increases as long as the required rate of return is greater than the growth rate.

	As the current dividend increases the intrinsic value decreases
	As the current dividend decreases the intrinsic value increases

Question 9

Macrotech is expanding rapidly and currently retains all of its earnings and does not pay a dividend. 4 years from today, Macrotech plans to begin paying a dividend of $1 per share and then dividends will increase at a constant rate of 5% per year. If the required rate of return is 12% then what is the intrinsic value of Macrotech stock today?

	$14.29
	$10.17

	$8.33
	$15.00

Question 10

KTS corporation has $4 million in debt and 2 million shares outstanding. Assume the present value of all future FCF is $10 million. What is the price per share of stock?

	$3
	$10

	$2
	$5