Question 8 (1 point)

Garville Corporation has a current stock price of $7.43 and is expected to sell for $8.14 in one year's time, immediately after it pays a dividend of $0.35. Which of the following is closest to Garville's equity cost of capital?

a. 4.8%

b. 6.1%

c. 6.7%

d. 9.6%

e. 14.3%

Question 9 (1 point)

Herring Fisheries plans to pay $0.65 per share in dividends in the coming year. If its equity cost of capital is 11%, and dividends are expected to grow by 2.5% per year in the future, what is the value of Herring's stock?

a. $24.05

b. $7.84

c. $5.91

d. $7.65

e. $26.00