XYZ Inc.'s dividend is expected to grow at 5% for the next two years and then at 2.5% forever. If the current dividend is $3 and the required return is 15%, what is the price of the stock?

A) $25.10

B) $25.75

C) $26.39

D) $27.48

E) $28.91

You are considering an investment which has the following cash flows. If you require a four year payback period, should you take the investment?

CF0 = -$70,000

CF1 = $10,000

CF2 = $20,000

CF3 = -$25,000

CF4 = $40,000

CF5 = $40,000

CF6 = $20,000

A) Yes, the payback is 2.625 years.

B) Yes, the payback is 3.375 years.

C) No, the payback is 4.625 years.

D) No, the payback is 5.500 years.

E) None of the above.