This document contains 35 multiple choice questions regarding finance concepts like present and future value, annuities, bonds, stocks, dividends, and capital budgeting. The questions are from a homework assignment on topics like time value of money, bond valuation, stock valuation, dividend valuation models, and net present value. Sample calculations are provided for various cash flows with different interest rates and time periods.
1.You have $24,435.78 in a brokerage account, and you plan to depo.docxpaynetawnya
1.You have $24,435.78 in a brokerage account, and you plan to deposit an additional $6,000 at the end of every future year until your account totals $240,000. You expect to earn 12% annually on the account. How many years will it take to reach your goal? Round your answer to two decimal places at the end of the calculations.
years
2.Time for a lump sum to double
If you deposit money today in an account that pays 5.5% annual interest, how long will it take to double your money? Round your answer to two decimal places.
years
3.Present and future values of a cash flow stream
An investment will pay $150 at the end of each of the next 3 years, $250 at the end of Year 4, $300 at the end of Year 5, and $600 at the end of Year 6.
a. If other investments of equal risk earn 4% annually, what is its present value? Round your answer to the nearest cent.
$
b. If other investments of equal risk earn 4% annually, what is its future value? Round your answer to the nearest cent.
$
Problem 5-14
Future value of an annuity
Find the future values of these ordinary annuities. Compounding occurs once a year. Round your answers to the nearest cent.
a. $1,000 per year for 10 years at 6%.
$
b. $500 per year for 5 years at 3%.
$
c. $1,000 per year for 16 years at 0%.
$
Rework previous parts assuming that they are annuities due. Round your answers to the nearest cent.
d. $1,000 per year for 10 years at 6%.
$
e. $500 per year for 5 years at 3%.
$
f. $1,000 per year for 16 years at 0%.
$
Problem 5-9
Present and future values for different periods
Find the following values using the equations and then a financial calculator. Compounding/discounting occurs annually. Round your answers to the nearest cent.
a. An initial $500 compounded for 1 year at 8%.
$
b. An initial $500 compounded for 2 years at 8%.
$
c. The present value of $500 due in 1 year at a discount rate of 8%.
$
d. The present value of $500 due in 2 years at a discount rate of 8%.
$
Problem 6-1
Yield Curves
TERM
RATE
6 months
5.03%
1 year
5.41%
2 years
5.65%
3 years
5.79%
4 years
5.87%
5 years
6.1%
10 years
6.35%
20 years
6.63%
30 years
6.76%
a. Plot a yield curve based on these data.
The correct sketch is A, B, C, D
.
b. What type of yield curve is shown?
1. The yield curve is abnormal
2.upward sloping
3. curve is flat
4. downward sloping
5. inverted
c. What information does this graph tell you?
1. In general the rate of inflation is expected to increase and the maturity risk premium is less than zero
2. In general the rate of inflation is expected to decrease and the maturity risk premium is less than zero
3. In genera the rate of inflation is expected to increase and the maturity risk premium is greater than zero
4. The shape of the yield curve depends only on expectations about future inflation which is expected to increase
5. In general the rate of inflation is expected to decrease and the maturity risk premium is greater than zero
d. Based on this y ...
The risk-free rate, kRF, is 3.6 percent and the market risk premiu.docxssusera34210
The risk-free rate, kRF, is 3.6 percent and the market risk premium, (kM - kRF), is 5 percent. Assume that required returns are based on the CAPM. Your $1 million portfolio consists of $ 206 ,000 invested in a stock that has a beta of 1.3 and the remainder invested in a stock that has a beta of 0.5 . What is the required return on this portfolio? Enter your answer to the nearest .1%. Do not use the % sign in your answer, thus 12.1% is 12. 1 rather than 12.1 or .121.
Your Answer:
Question 2 options:
Answer
Question 3 (3.9 points)
Jenni Company has a total debt to total assets ratio of 45% and a current ratio of 4.1. The firm's stock sells for $ 119.4 per share. The total market value of the equity is $ 5.7 million. The market-to-book ratio is 5.7 . What is the book value per share? Show your answer to the nearest $.01. Do not use the $ symbol in your answer, thus if your answer is $2.80 enter 2.80.
Your Answer:
Question 3 options:
Answer
Question 4 (3.9 points)
Thompson Inc.'s latest EPS was $3.50, its book value per share was $22.75, it had 215,000 shares outstanding, and its debt-to-assets ratio was 46%. How much debt was outstanding?
Question 4 options:
$3,393,738
$3,572,356
$3,958,289
$4,166,620
Question 5 (3.9 points)
You have just taken out a 10-year, $12,075 loan to purchase a new car. This loan is to be repaid in 120 equal end-of-month installments. If each of the monthly installments is $150, what is the effective annual interest rate on this car loan?
Question 5 options:
6.5431%
7.8942%
8.544%
8.8871%
9.0438%
Question 6 (3.9 points)
A fixed coupon bond with par value of $1,000 has a coupon of 8%, semiannually payable. The current annual nominal market interest rate (i.e., yield to maturity) for this bond is 6%. Therefore the bond is selling ……….. and the bond's current yield is ………..
Question 6 options:
at a premium; greater than 8%
at par value; at 8%
at a premium; less than 8%
at a discount; greater than 8%
at a discount; less than 8%
Question 7 (3.9 points)
2 years ago an investor purchased a 4% semi-annual compounding coupon bond with a remaining maturity of 20 years at a price of (at that time) 90% of par. Today, i.e. two years after the purchase, the investor realizes that the bond has exactly the same price like it had two years ago (i.e. 90%). Based on this information, which of the following answers is correct:
Question 7 options:
The YTM of the 4% Bond today is the same like two years ago.
Overall, the profit for the investor from this investment over the two years is Zero.
Over the remaining life of the bond, the value of the principal exceeds the value of the coupons.
If the investor held the 4% coupon bond until maturity, the overall return from this investment over the 18 years would be 100% minus 90%, i.e. 10%.
None of the above answers is correct.
Question 8 (3.9 points)
Consider the following information and then calculate the required rate of return for the Universal Investment Fund, whi ...
1.You have $24,435.78 in a brokerage account, and you plan to depo.docxpaynetawnya
1.You have $24,435.78 in a brokerage account, and you plan to deposit an additional $6,000 at the end of every future year until your account totals $240,000. You expect to earn 12% annually on the account. How many years will it take to reach your goal? Round your answer to two decimal places at the end of the calculations.
years
2.Time for a lump sum to double
If you deposit money today in an account that pays 5.5% annual interest, how long will it take to double your money? Round your answer to two decimal places.
years
3.Present and future values of a cash flow stream
An investment will pay $150 at the end of each of the next 3 years, $250 at the end of Year 4, $300 at the end of Year 5, and $600 at the end of Year 6.
a. If other investments of equal risk earn 4% annually, what is its present value? Round your answer to the nearest cent.
$
b. If other investments of equal risk earn 4% annually, what is its future value? Round your answer to the nearest cent.
$
Problem 5-14
Future value of an annuity
Find the future values of these ordinary annuities. Compounding occurs once a year. Round your answers to the nearest cent.
a. $1,000 per year for 10 years at 6%.
$
b. $500 per year for 5 years at 3%.
$
c. $1,000 per year for 16 years at 0%.
$
Rework previous parts assuming that they are annuities due. Round your answers to the nearest cent.
d. $1,000 per year for 10 years at 6%.
$
e. $500 per year for 5 years at 3%.
$
f. $1,000 per year for 16 years at 0%.
$
Problem 5-9
Present and future values for different periods
Find the following values using the equations and then a financial calculator. Compounding/discounting occurs annually. Round your answers to the nearest cent.
a. An initial $500 compounded for 1 year at 8%.
$
b. An initial $500 compounded for 2 years at 8%.
$
c. The present value of $500 due in 1 year at a discount rate of 8%.
$
d. The present value of $500 due in 2 years at a discount rate of 8%.
$
Problem 6-1
Yield Curves
TERM
RATE
6 months
5.03%
1 year
5.41%
2 years
5.65%
3 years
5.79%
4 years
5.87%
5 years
6.1%
10 years
6.35%
20 years
6.63%
30 years
6.76%
a. Plot a yield curve based on these data.
The correct sketch is A, B, C, D
.
b. What type of yield curve is shown?
1. The yield curve is abnormal
2.upward sloping
3. curve is flat
4. downward sloping
5. inverted
c. What information does this graph tell you?
1. In general the rate of inflation is expected to increase and the maturity risk premium is less than zero
2. In general the rate of inflation is expected to decrease and the maturity risk premium is less than zero
3. In genera the rate of inflation is expected to increase and the maturity risk premium is greater than zero
4. The shape of the yield curve depends only on expectations about future inflation which is expected to increase
5. In general the rate of inflation is expected to decrease and the maturity risk premium is greater than zero
d. Based on this y ...
The risk-free rate, kRF, is 3.6 percent and the market risk premiu.docxssusera34210
The risk-free rate, kRF, is 3.6 percent and the market risk premium, (kM - kRF), is 5 percent. Assume that required returns are based on the CAPM. Your $1 million portfolio consists of $ 206 ,000 invested in a stock that has a beta of 1.3 and the remainder invested in a stock that has a beta of 0.5 . What is the required return on this portfolio? Enter your answer to the nearest .1%. Do not use the % sign in your answer, thus 12.1% is 12. 1 rather than 12.1 or .121.
Your Answer:
Question 2 options:
Answer
Question 3 (3.9 points)
Jenni Company has a total debt to total assets ratio of 45% and a current ratio of 4.1. The firm's stock sells for $ 119.4 per share. The total market value of the equity is $ 5.7 million. The market-to-book ratio is 5.7 . What is the book value per share? Show your answer to the nearest $.01. Do not use the $ symbol in your answer, thus if your answer is $2.80 enter 2.80.
Your Answer:
Question 3 options:
Answer
Question 4 (3.9 points)
Thompson Inc.'s latest EPS was $3.50, its book value per share was $22.75, it had 215,000 shares outstanding, and its debt-to-assets ratio was 46%. How much debt was outstanding?
Question 4 options:
$3,393,738
$3,572,356
$3,958,289
$4,166,620
Question 5 (3.9 points)
You have just taken out a 10-year, $12,075 loan to purchase a new car. This loan is to be repaid in 120 equal end-of-month installments. If each of the monthly installments is $150, what is the effective annual interest rate on this car loan?
Question 5 options:
6.5431%
7.8942%
8.544%
8.8871%
9.0438%
Question 6 (3.9 points)
A fixed coupon bond with par value of $1,000 has a coupon of 8%, semiannually payable. The current annual nominal market interest rate (i.e., yield to maturity) for this bond is 6%. Therefore the bond is selling ……….. and the bond's current yield is ………..
Question 6 options:
at a premium; greater than 8%
at par value; at 8%
at a premium; less than 8%
at a discount; greater than 8%
at a discount; less than 8%
Question 7 (3.9 points)
2 years ago an investor purchased a 4% semi-annual compounding coupon bond with a remaining maturity of 20 years at a price of (at that time) 90% of par. Today, i.e. two years after the purchase, the investor realizes that the bond has exactly the same price like it had two years ago (i.e. 90%). Based on this information, which of the following answers is correct:
Question 7 options:
The YTM of the 4% Bond today is the same like two years ago.
Overall, the profit for the investor from this investment over the two years is Zero.
Over the remaining life of the bond, the value of the principal exceeds the value of the coupons.
If the investor held the 4% coupon bond until maturity, the overall return from this investment over the 18 years would be 100% minus 90%, i.e. 10%.
None of the above answers is correct.
Question 8 (3.9 points)
Consider the following information and then calculate the required rate of return for the Universal Investment Fund, whi ...
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June 3, 2024 Anti-Semitism Letter Sent to MIT President Kornbluth and MIT Cor...Levi Shapiro
Letter from the Congress of the United States regarding Anti-Semitism sent June 3rd to MIT President Sally Kornbluth, MIT Corp Chair, Mark Gorenberg
Dear Dr. Kornbluth and Mr. Gorenberg,
The US House of Representatives is deeply concerned by ongoing and pervasive acts of antisemitic
harassment and intimidation at the Massachusetts Institute of Technology (MIT). Failing to act decisively to ensure a safe learning environment for all students would be a grave dereliction of your responsibilities as President of MIT and Chair of the MIT Corporation.
This Congress will not stand idly by and allow an environment hostile to Jewish students to persist. The House believes that your institution is in violation of Title VI of the Civil Rights Act, and the inability or
unwillingness to rectify this violation through action requires accountability.
Postsecondary education is a unique opportunity for students to learn and have their ideas and beliefs challenged. However, universities receiving hundreds of millions of federal funds annually have denied
students that opportunity and have been hijacked to become venues for the promotion of terrorism, antisemitic harassment and intimidation, unlawful encampments, and in some cases, assaults and riots.
The House of Representatives will not countenance the use of federal funds to indoctrinate students into hateful, antisemitic, anti-American supporters of terrorism. Investigations into campus antisemitism by the Committee on Education and the Workforce and the Committee on Ways and Means have been expanded into a Congress-wide probe across all relevant jurisdictions to address this national crisis. The undersigned Committees will conduct oversight into the use of federal funds at MIT and its learning environment under authorities granted to each Committee.
• The Committee on Education and the Workforce has been investigating your institution since December 7, 2023. The Committee has broad jurisdiction over postsecondary education, including its compliance with Title VI of the Civil Rights Act, campus safety concerns over disruptions to the learning environment, and the awarding of federal student aid under the Higher Education Act.
• The Committee on Oversight and Accountability is investigating the sources of funding and other support flowing to groups espousing pro-Hamas propaganda and engaged in antisemitic harassment and intimidation of students. The Committee on Oversight and Accountability is the principal oversight committee of the US House of Representatives and has broad authority to investigate “any matter” at “any time” under House Rule X.
• The Committee on Ways and Means has been investigating several universities since November 15, 2023, when the Committee held a hearing entitled From Ivory Towers to Dark Corners: Investigating the Nexus Between Antisemitism, Tax-Exempt Universities, and Terror Financing. The Committee followed the hearing with letters to those institutions on January 10, 202
Synthetic Fiber Construction in lab .pptxPavel ( NSTU)
Synthetic fiber production is a fascinating and complex field that blends chemistry, engineering, and environmental science. By understanding these aspects, students can gain a comprehensive view of synthetic fiber production, its impact on society and the environment, and the potential for future innovations. Synthetic fibers play a crucial role in modern society, impacting various aspects of daily life, industry, and the environment. ynthetic fibers are integral to modern life, offering a range of benefits from cost-effectiveness and versatility to innovative applications and performance characteristics. While they pose environmental challenges, ongoing research and development aim to create more sustainable and eco-friendly alternatives. Understanding the importance of synthetic fibers helps in appreciating their role in the economy, industry, and daily life, while also emphasizing the need for sustainable practices and innovation.
2024.06.01 Introducing a competency framework for languag learning materials ...Sandy Millin
http://sandymillin.wordpress.com/iateflwebinar2024
Published classroom materials form the basis of syllabuses, drive teacher professional development, and have a potentially huge influence on learners, teachers and education systems. All teachers also create their own materials, whether a few sentences on a blackboard, a highly-structured fully-realised online course, or anything in between. Despite this, the knowledge and skills needed to create effective language learning materials are rarely part of teacher training, and are mostly learnt by trial and error.
Knowledge and skills frameworks, generally called competency frameworks, for ELT teachers, trainers and managers have existed for a few years now. However, until I created one for my MA dissertation, there wasn’t one drawing together what we need to know and do to be able to effectively produce language learning materials.
This webinar will introduce you to my framework, highlighting the key competencies I identified from my research. It will also show how anybody involved in language teaching (any language, not just English!), teacher training, managing schools or developing language learning materials can benefit from using the framework.
Instructions for Submissions thorugh G- Classroom.pptxJheel Barad
This presentation provides a briefing on how to upload submissions and documents in Google Classroom. It was prepared as part of an orientation for new Sainik School in-service teacher trainees. As a training officer, my goal is to ensure that you are comfortable and proficient with this essential tool for managing assignments and fostering student engagement.
Operation “Blue Star” is the only event in the history of Independent India where the state went into war with its own people. Even after about 40 years it is not clear if it was culmination of states anger over people of the region, a political game of power or start of dictatorial chapter in the democratic setup.
The people of Punjab felt alienated from main stream due to denial of their just demands during a long democratic struggle since independence. As it happen all over the word, it led to militant struggle with great loss of lives of military, police and civilian personnel. Killing of Indira Gandhi and massacre of innocent Sikhs in Delhi and other India cities was also associated with this movement.
Macroeconomics- Movie Location
This will be used as part of your Personal Professional Portfolio once graded.
Objective:
Prepare a presentation or a paper using research, basic comparative analysis, data organization and application of economic information. You will make an informed assessment of an economic climate outside of the United States to accomplish an entertainment industry objective.
The French Revolution, which began in 1789, was a period of radical social and political upheaval in France. It marked the decline of absolute monarchies, the rise of secular and democratic republics, and the eventual rise of Napoleon Bonaparte. This revolutionary period is crucial in understanding the transition from feudalism to modernity in Europe.
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Read| The latest issue of The Challenger is here! We are thrilled to announce that our school paper has qualified for the NATIONAL SCHOOLS PRESS CONFERENCE (NSPC) 2024. Thank you for your unwavering support and trust. Dive into the stories that made us stand out!
A Strategic Approach: GenAI in EducationPeter Windle
Artificial Intelligence (AI) technologies such as Generative AI, Image Generators and Large Language Models have had a dramatic impact on teaching, learning and assessment over the past 18 months. The most immediate threat AI posed was to Academic Integrity with Higher Education Institutes (HEIs) focusing their efforts on combating the use of GenAI in assessment. Guidelines were developed for staff and students, policies put in place too. Innovative educators have forged paths in the use of Generative AI for teaching, learning and assessments leading to pockets of transformation springing up across HEIs, often with little or no top-down guidance, support or direction.
This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
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BUSI 530 Week 3 Homework 3 (Solutions) NEW
Question 1
Compute the present value of a $300 cash flow for
the following combinations of discount rates and
times: (Do not round intermediate calculations.
Round your answers to 2 decimal places.)
Question 2
Compute the future value of a $190 cash flow for
the same combinations of rates and times: (Do not
round intermediate calculations. Round your
answers to 2 decimal places.)
Question 3
2. In 1880 five aboriginal trackers were each
promised the equivalent of 100 Australian dollars
for helping to capture the notorious outlaw Ned
Kelley. In 1995 the granddaughters of two of the
trackers claimed that this reward had not been
paid. The prime minister stated that if this was
true, the government would be happy to pay the
$100. However, the granddaughters also claimed
that they were entitled to compound interest.
Question 4
a¬1. Calculate the present value of an annual
payment of $1,050 you would received for 12
years if the interest rate is 3%. (Do not round
intermediate calculations. Round your answer to 2
decimal places.)
a¬2. Calculate the present value of an annual
payment of $850 you would received for 17 years
if the interest rate is 3%. (Do not round
intermediate calculations. Round your answer to 2
decimal places.)
a¬3. Which option would you prefer?
b¬1. Calculate the present value of an annual
payment of $1,050 you would received for 12
years if the interest rate is 12%. (Do not round
3. intermediate calculations. Round your answer to 2
decimal places.)
b¬2. Calculate the present value of an annual
payment of $850 you would received for 17 years
if the interest rate is 12%. (Do not round
intermediate calculations. Round your answer to 2
decimal places.)
b¬3. Which option would you prefer?
Question 5
Find the annual interest rate. (Do not round
intermediate calculations. Round your answers to
2
Question 6
If you earn 5.00% per year on your bank account,
how long will it take an account with $100 to
double to $200? Use the log formula. (Do not
round intermediate calculations. Round your
answer to 2 decimal places.)
Question 7
Investments in the stock market have increased at
an average compound rate of about 5% since
1903. It is now 2012.
4. Question 8
In mid¬2010 a pound of apples cost $1.42, while
oranges cost $1.26. Ten years earlier the price of
apples was only $1.00 a pound and that of oranges
was $.78 a pound.
Question 9
a. If you take out an $8,200 car loan that calls for
60 monthly payments starting after 1 month at an
APR of 12%, what is your monthly payment? (Do
not round intermediate calculations. Round your
answer to 2 decimal places.)
b. What is the effective annual interest rate on the
loan? (Do not round intermediate calculations.
Round your answer to 2 decimal places.)
Question 10
Professor’s Annuity Corp. offers a lifetime annuity
to retiring professors. For a payment of $83,000 at
age 65, the firm will pay the retiring professor
$675 a month until death
Question 11
5. You can buy property today for $2.5 million and
sell it in 4 years for $3.5 million. (You earn no
rental income on the property.)
Question 12
A factory costs $450,000. You forecast that it will
produce cash inflows of $105,000 in year 1,
$165,000 in year 2, and $270,000 in year 3. The
discount rate is 11%
Question 13
If the interest rate this year is 8.4% and the
interest rate next year will be 10.4%, what is the
future value of $1 after 2 years? What is the
present value of a payment of $1 to be received in
2 years? (Do not round intermediate calculations.
Round your answers to 4 decimal places.)
Question 14
A 10¬year Treasury bond is issued with face value
of $1,000, paying interest of $72 per year. If
market yields increase shortly after the T¬bond is
issued, what is the bond’s coupon rate? (Round
your answer to 1 decimal place.)
Question 15
6. A 10¬year Circular File bond pays interest of $55
annually and sells for $984. What are its coupon
rate and yield to maturity? (Do not round
intermediate calculations. Round "Coupon rate" to
1 decimal place and "Yield to maturity" to 2
decimal places.)
Question 16
A bond has 16 years until maturity, a coupon rate
of 6.8%, and sells for $1,106.
Question 17
General Matter’s outstanding bond issue has a
coupon rate of 10.6%, and it sells at a yield to
maturity of 8.70%. The firm wishes to issue
additional bonds to the public at face value. What
coupon rate must the new bonds offer in order to
sell at face value? (Round your answer to 2
decimal places.)
Question 18
Refer the table below:
Question 19
7. One bond has a coupon rate of 5.8%, another a
coupon rate of 8.4%. Both bonds have 9¬year
maturities and sell at a yield to maturity of 7%
Question 20
Sure Tea Co. has issued 4.6% annual coupon bonds
that are now selling at a yield to maturity of 6.5%
and current yield of 5.8492%. What is the
remaining maturity of these bonds? (Do not round
intermediate calculations. Round your answer to 2
decimal places.)
Question 21
Consider three bonds with 6.4% coupon rates, all
selling at face value. The short¬term bond has a
maturity of 4 years, the intermediate¬term bond
has maturity 8 years, and the long¬term bond has
maturity 30 years.
Question 22
A 2¬year maturity bond with face value of $1,000
makes annual coupon payments of $96 and is
selling at face value. What will be the rate of return
on the bond if its yield to maturity at the end of the
year is (Do not round intermediate calculations.
Round your answers to 2 decimal places.)
8. Question 23
A bond’s credit rating provides a guide to its risk.
Long¬term bonds rated Aa currently offer yields to
maturity of 4.5%. A¬rated bonds sell at yields of
4.8%. Assume a 10¬year bond with a coupon rate
of 4% is downgraded by Moody’s from Aa to A
rating
Question 24
Favored stock will pay a dividend this year of
$2.64 per share. Its dividend yield is 8%. At what
price is the stock selling? (Do not round
intermediate calculations.)
Question 25
Preferred Products has issued preferred stock
with an $6.27 annual dividend that will be paid in
perpetuity
Question 26
Waterworks has a dividend yield of 10.50%. If its
dividend is expected to grow at a constant rate of
7.50%, what must be the expected rate of return
on the company’s stock? (Do not round
intermediate calculations. Round your answer to 2
decimal places.)
9. Question 27
Steady As She Goes, Inc., will pay a year¬end
dividend of $3.10 per share. Investors expect the
dividend to grow at a rate of 5% indefinitely
Question 28
Integrated Potato Chips paid a $2.80 per share
dividend yesterday. You expect the dividend to
grow steadily at a rate of 4% per year.
Question 29
Arts and Crafts, Inc., will pay a dividend of $3 per
share in 1 year. It sells at $50 a share and firms in
the same industry provide an expected rate of
return of 12%. What must be the expected growth
rate of the company’s dividends? (Do not round
intermediate calculations.)
Question 30
Horse and Buggy Inc. is in a declining industry.
Sales, earnings, and dividends are all shrinking at
a rate of 10% per year.
Question 31
10. You expect a share of stock to pay dividends of
$1.80, $1.95, and $2.60 in each of the next 3 years.
You believe the stock will sell for $30 at the end of
the third year.
Question 32
No¬Growth Industries pays out all of its earnings
as dividends. It will pay its next $3 per share
dividend in a year. The discount rate is 12%
Question 33
Assume that market and book values are equal for
current assets, current liabilities, and debt and
other long¬ term liabilities
Question 34
Grandiose Growth has a dividend growth rate of
20%. The discount rate is 10%. The end¬of¬year
dividend will be $2 per share
Question 35
Computer Corp. reinvests 60% of its earnings in
the firm. The stock sells for $55, and the next
dividend will be $3.30 per share. The discount rate
is 10%. What is the rate of return on the
company’s reinvested funds? (Do not round
