Question_MID2_10Dec_2nd

Question_MID2_10Dec_2nd

Question
	
31. Whited Inc.'s stock currently sells for
$35.25 per share. The dividend is
projected to increase at a constant
rate of 4.75% per year. The required
rate of return on the stock, rs, is 11.50%. What is the stock's expected price 5 years
from now?


















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d. $43.34



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32. Casino Inc. is
expected to pay a dividend of $6 per share at the end of year one and these
dividends are expected to grow at a constant rate of 6% per year forever. If the required rate of return on the stock
is 18%, what is current value of the stock today?



A) $30



B) $50



C) $100



D) $54






33. Dividend growth
rate for a stable firm can be estimated as:



A) Plow back rate /
the return on equity (ROE)



B) Plow back rate *
the return on equity (ROE)



C) Plow back
rate + the return on equity (ROE)



D) Plow back
rate -
the return on equity (ROE)






34. A
four-year bond has an 8% coupon rate and a face value of $1000. If the current price of the bond is $878.31,
calculate the yield to maturity of the bond (assuming annual interest
payments).



A) 8%




B)
12%



C)
10%



D) 6%







35.
Super Computer Company's stock is selling for $100 per share today. It is expected that this stock will pay a
dividend of 5 dollars per share, and then be sold for $120 per share at the end
of one year. Calculate the expected rate
of return for the shareholders.



A)
20%



B)
15%



C)
10%



D)
25%