You are considering the purchase of a common stock that paid a dividend of $1.00 yesterday. You expect this stock to have a growth rate of 20 percent for the next 3 years, resulting in dividends of D1=$1.20, D2=$1.44, and D3=$1.73. The long-run normal growth rate after year 3 is expected to be 8 percent (that is, a constant growth rate after year 3 of 8% per year forever). If you require a 12 percent rate of return, how much should you be willing to pay for this stock? Select one: a. $36.73 b. $ 7.24 C. $24.89 d. $38.65 Market efficiency implies which of the following? Select one: a. market value = intrinsic value b. book value = intrinsic value c. book value = market value d. liquidation value = book value Which of the following statements concerning junk bonds is most correct? Select one: a. Junk bonds have higher interest rates than AAA-rated bonds because of the higher risk. b. A rational investor will always prefer a AAA-rated bond to a junk bond. c. Junk bonds may also be called low-yielding securities. d. Junk bonds are priced higher than AAA-rated bonds because junk bonds are more riksy