R Technology corporation will pay dividends as follows: year 1 = $1, year 2 = $2, and year 3 = $4(all are per share amounts). The dividends are expected to grow 5% per year since year four. If the required rate of return in the stock is 15%, calculate the current value of the stock. $32.63 $35.26 $40.00 When would a reduction in cash dividends be in the best interests of current shareholders? When the firm has an opportunity to invest in positive NPV projects. When paying the dividend would cause the book value of equity to be negative. Never. Investors always want higher dividends. All else the same, a higher corporate tax rate will increase the WACC of a firm with some debt in its capital structure will decrease the WAAC of a firm with some debt in its capital structure will change the WACC of a firm with some debt in its capital structure, but the direction is unclear. Suppose stock A has higher variance than stock B. According to CAPM, which one is expected to deliver a higher return? A. B. The information provided is insufficient. The weighted average cost of a company ultimately depends on the: mix of projects related to a firm's current operations. source of the funds. use of the funds. The Heller Company has a bond outstanding with a face value of $1,000 that matures in 15 years. The bond has a coupon rate of 4% and the coupon payments are made annually. If the YTM on this bond is 6%, then the bond will trade at A premium. A discount Par