The current dividend yield on Chrysler's common stock is 3.1 percent. The ompany just paid a $1.68 annual dividend and announced plans to pay $1.78 next ear. The dividend growth rate is expected to remain constant at the current vel. What is the required rate of return on this stock? ) a) 8.42% b) 9.05% ) 8.725 d) 10.15% d None of the above How much are you willing to pay for one share of Levine stock if the company st paid a $1.5 annual dividend, the dividends increase by 3% annually, and you quire a 15% rate of return? a) $12.5 b) $10 c) $12.88 d) $13 None of the above. 13. Savickas Petroleum's stock has a required return of 12%, and the stock sells for $40 per share. The firm just paid a dividend of $1, and the dividend is expected to grow by 30% per year for the next 4 years. After t 4 the dividend is expected to grow at a constant rate of X% per year forever. What is the stock's expected constant growth rate after t = 4, i.e. what is X?" O a) 5.17% b) 5.44% c) 5.72% d) 6.34% O None of the above 14. Company X offers a common stock that pays an annual dividend of $3 a share. The company has promised to maintain a constant dividend. How much are you willing to pay for one share of this stock if you want to earn a 10% return on your investment? O a) $33 O b) $32 O C) 530 O d) $28 O None of the above 15. The common stock of Bruner Aeronautics sells for $80 a share. The stock expects to pay $2 per share next month when the annual dividend is distributed The company has established a pattern of increasing their dividends by 2% annually. What is the market rate of return on this stock? a) 4.5% b) 2.5% O c) 2% d) 49 None of the above 16. Fletcher Company's current stock price is $36.00, its last dividend was $2.40, and its required rate of return is 12%. If dividends are expected to grow at a constant rate, g, in the future and if rs is expected to remain at 12%, what is Fletcher's expected stock price 5 years from now? O a) $45.95 b) $46.95 O c) $47.95 O d) $48.24 O None of the above 17. Fred Enterprises' stock currently sells for $40per share. The dividend is projected to increase at a constant rate of 6% per year. The required rate of return on the stock, rs, is 9.50%. What is the stock's expected price 3 years from today? * a) $47.64 O b) $40 O c) $37.64 d) $46 O None of the above - Dell Inc. has an outstanding issue of perpetual preferred stock with an annual zidend of $8.5 per share. If the required return on this preferred stock is 7.5%, what price should the stock sell? * a) $113.33 b) $106 c) $105 d) $103 None of the above 9. Ralph Industries just paid a dividend of DO = $1. 5. Analysts expect the company's dividend to grow by 30% this year, by 10% in Year 2, and at a constant ate of 5% in Year 3 and thereafter. The required return on this low-risk stock is 2%. What is the best estimate of the stock's current market value? * a) $50.20 b) $50.98 $ c) $60 98 d) $45.80 None of the above 20. Spinneys Company's last dividend was $1.25. The dividend growth rate is expected to be constant at 15% for 3 years, after which dividends are expected to grow at a rate of 6% forever. If the firm's required return (rs) is 11%, what is its current stock price? a) $42.60 b) $40.64 O c) $33.49 d) $45.80 None of the above