UESTION 20

1. 25	B	C	D
   26	You have gathered the following financial data for the BBC Company.
   27	The following dividends are expected over the next five years.
   28	Management expects the price in year 5 to be		$34.89
   29	Year	Dividends
   30	1	$4.35
   31	2
   32	3	$5.32
   33	4
   34	5	$5.23
   35	5	$34.89
   36	Firms in the same risk class have growth rates of		4.00%
   37	The expected rate of return over the next five years is		11.50%
   38	What is the intrinsic value of the BBC stock today?

   	a.	Intrinsic Value of BBC stock = $44.02
   	b.	Intrinsic Value of BBC stock = $23.02
   	c.	Intrinsic Value of BBC stock = $31.02
   	d.	Intrinsic Value of BBC stock = $13.02

4 points

QUESTION 21

1. 50	B	C	D	E
   51	Companies similar to Google experience growth rates that exceed industry norms.
   52	Assume that annual growth rates will be approximately		27.00%
   53	over the next three years.
   54	The current dividend amount is		$4.71
   55	The expected rate of return is		19.35%
   56	After yeart three, a constant growth rate is expected to be		7.80%
   57	What is the intrinsic value of a company with these metrics?

   	a.	Intrinsic Value of Variable Growth Stock = $99.68
   	b.	Intrinsic Value of Variable Growth Stock = $78.99
   	c.	Intrinsic Value of Variable Growth Stock = $86.99
   	d.	Intrinsic Value of Variable Growth Stock = $68.99

5 points

QUESTION 22

1. Based on the data given in the 2 Stage DDM Template and Problem,

   what is the intrinsic value of this stock?

   	a.	Intrinsic Value = $226.95
   	b.	Intrinsic Value = $181.89
   	c.	Intrinsic Value = $255.95
   	d.	Intrinsic Value = $262.95

5 points

QUESTION 23

1. Based on the file, 2 Stage DDM Template and Problems,

   If the 1st Stage Growth Rate is 14%

   and the Duration of the Growth Period is 20.0

   What is the resulting PVGO?

   	a.	PVGO = $219.61
   	b.	PVGO = $123.92
   	c.	PVGO = $178.96
   	d.	PVGO = $288.41

QUESTION 24

1. Based on the 2 Stage DDM Template and Problem,

   what is the Current Price Earnings Ratio?

   	a.	P/E= 36.75
   	b.	P/E = 34.10
   	c.	P/E = 24.07
   	d.	P/E = 42.07