Treasury securities are issued by the federal government. low grade debt instruments. known for low liquidity. bonds that can only be held by American citizens. always discount bonds. Solar Technologies is a young company that is growing quickly. No dividends will be paid for the next 6 years. The company will pay a $5 dividend in year 7 and will increase the dividend 4% per year, thereafter. If the return on the stock is 12%, what is the current share price (at time 0)? $31.66 $28.75 $98.22 $39.71 $62.50 A preferred stock pays a dividend of $1.00 every 6 months. What is the required return (annually) if the stock is currently trading at $20? 20% 5% 10% 16% 025% Mike owns a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.20 and the total portfolio is twice as risky as the market, what must the beta be for the other stock in the portfolio? 2.00 3.50 1.80 1.00 4.80 Which of the following statements is FALSE? For a shareholder, dividends received are taxed. Many companies distribute part of their earnings to shareholders through cash dividends. Dividends paid to shareholders are not a tax deductible expense for the company. Coupon payments on bonds are not a tax deductible expense for the company. The goal of diversification is to eliminate firm-specific risk. systematic risk. market risk. total risk