QUESTION 25 Next year, Jensen's will pay an annual dividend of $3.32 per share. The company has been reducing ( declining) its dividends by 7 percent annually. What is this stock worth today if the required return is 15.5 percent? $14.76 $16.92 O $15.68 $17.11 QUESTION 26 Milky Land Co. is growing quickly, Dividends are expected to grow at a rate of 30 peront for the next three years, with the growth rate falling off to a constant 4 percent thereafter. If the required return is 11 percent, and the company just paid a dividend of 2.15, what is the current share price? $5281 100.23 307.20 QUESTION 27 The risk-free rate of return is 2.7 percent, and the market risk premium is 6.9 percent. What is the expected rate of return on a stock with a beta of 1.08? O 10.15% 11.19% O 9.27% O 8.32% QUESTION 28 The common stock of Alpha Manufacturers has a beta of 1.24 and an actual expected return of 14 40 percent. The risk-free rate of return is 3.7 percent and the market rate of return is 11.78 percent. Which one of the following statements is true given this information? The stock is currently underpriced Based on the CAPM the required rate of return should be 13.72% and therefore the the actual expected stock return indicates that the stock is currently overpriced The actual expected return of 14.40% should be on the security market line. To be correctly priced according to CAPM, the stock should have an expected retum of 18.56 percent