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Question 4 (1 point) Shrek, Inc., just paid a dividend of $4.00. The company expects to have a supernormal year and grow at 10% over
Question 4 (1 point) Shrek, Inc., just paid a dividend of $4.00. The company expects to have a supernormal year and grow at 10% over the next year. After that, the company will have constant growth rate of 5% forever. The cost of equity capital for the company is 996. What is the company's current stock price based on the above data? $120 $110 $100 $87.52 Question 5 (1 point) Assume that Leo has a new venture that costs $100,000. The company expects to have cash flows of $40,000 per year for the first four years and $50,000 in year 5. There will be no salvage value and the company's cost of capital is 9.23%. Based on this data, calculate the NPV and decide if you would accept the project using the NPV method? Hint: You accept a project if NPV is positive. NPV = Present value of future cash flows minus initial investment $61,093; accept $75,120; accept $89.098; reject -$2096; reject
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