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Question 25 (1 point) The Hedless Corporation is expected to pay a dividend of $3 per share next year (D1). The dividend of this company
Question 25 (1 point) The Hedless Corporation is expected to pay a dividend of $3 per share next year (D1). The dividend of this company grows at a steady rate of 8% per year. Based on this information, what will the dividend be in five years? $3.24 None of the answers is correct $3 $4.08 $4.41 Previous Page Next Page Page 25 of 50 Question 26 (1 point) Back to the Future Corporation is a young start-up company. No dividends will be paid on the stock for the first year (D1) and $1.5 is expected for year 2. The company will then pay a $2.50 per share dividend in year 3 and will increase the dividend by 5% per year thereafter. The required return on this stock is 15%. What is the current share price (PO)? None of the answers is correct $26.25 $25 $20.04 $21.00 Previous Page Next Page Page 26 of 50 Question 27 (1 point) Back to the Future Corporation is a young start-up company. No dividends will be paid on the stock for the first year (D1) and $1.5 is expected for year 2. The company will then pay a $2.50 per share dividend in year 3 and will increase the dividend by 5% per year thereafter. The required return on this stock is 15%. What is the Horizon Value at time 3 P3? None of the answers is correct $26.25 $21 $20 $25 Previous Page Next Page Page 27 of 50 Question 28 (1 point) Back to the Future Corporation is a young start-up company. No dividends will be paid on the stock for the first year (D1) and $1.5 is expected for year 2. The company will then pay a $2.50 per share dividend in year 3 and will increase the dividend by 5% per year thereafter. The required return on this stock is 15%. What is the dividend payment in year 4? $2.625 $2.10 O $2 $2.50 None of the answers is correct Previous Page Next Page Page 28 of 50 Question 29 (1 point) Assume you have calculated the IRRs of the following three projects of FINC Company with a required return (WACC) of 12%. 1) IRR = 11% 2) IRR = 13% 3) IRR = 14% Which of the following statements is correct? If projects are mutually exclusive invest in 2 and 3 If projects are independent invest only in 3 None of answers is correct If projects are mutually exclusive invest in 3 If projects are independent invest in 1, 2, and 3 Previous Page Next Page Page 29 of 50
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