QUESTION 47

A firm's common stock currently sells for $40 per share. The firm recently paid a dividend of $2 per share on its common stock, and investors expect the dividend to grow indefinitely at a constant rate of 10% per year. What's the firm's cost of common stock using DCF approach?

9.5%

10.0%

15.5%

16.5%

5 points

QUESTION 48

A stock is selling for $50 in the market. The company's beta is 1.2, the market risk premium (r_M- r_F) is 5%, and the risk-free rate is 3%. The most recent dividend paid is D₀= $2 and dividends are expected to grow at a constant rate g. What's the dividend growth rate g for this stock?

3.00%

4.19%

4.81%

5.0%

5 points

QUESTION 49

Using the information from Question 48, find the stock's capital gain yield.

3.00%

4.19%

4.81%

5.0%

5 points

QUESTION 50

Using the information from Question 48, find the stock's dividend yield.

3.00%

4.19%

4.81%

5.0%