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Thank you in advance QUESTION 27 It is expected that the dividend growth rate of Ryder Corporation will be 24% per year for 3 years.

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QUESTION 27 It is expected that the dividend growth rate of Ryder Corporation will be 24% per year for 3 years. Ryder will maintain a constant dividend growth rate of 5.4% from year four on. Ryder paid a dividend of $6.4 per share last year. The company's cost of equity is 15%. What is the price of the stock today (round to nearest $)? Do not round intermediate calculations. O A. $99 O B. $110 O C. $126 O D. $118 QUESTION 28 Consider a portfolio comprising stock X and stock Y. The standard deviations of stock X and Y are 36% and 16%, respectively. The expected return of stock X is 30%. The expected return of stock Y is 11%. T-bill rate is 3%. If the correlation coefficient between the returns on X and Y is 0.25, what is the approximate proportion of the optimal risky portfolio that should be invested in stock Y? O A. 39.3% O B. 52.9% O C. 45.3% O D. 60.7% QUESTION 29 It is expected that the EPS of Sunshine Inc. in the next six years will be $3.2, $4.0, $4.9, $5.8, $6.7, and $7.2. The company maintains a dividend payout ratio of 65%. The average trailing industry P/E in year 5 is expected to be 16. The cost of equity is 11%. What is the terminal value at the end of year 5? Do not round intermediate calculations. O A. $115 O B. $93 O C. $75 O D. $107

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