Question 1

1. A stock is expected to pay a dividend of $1.1 at the end of the year.  The required rate of return is r_s = 9.9%, and the expected constant growth rate is g = 7.7%.  What is the stock’s current price?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

Question 2

1. ABC Enterprises’ stock is currently selling for $60.3 per share.  The dividend is projected to increase at a constant rate of 5.3% per year.  The required rate of return on the stock is 12%.  What is the stock’s expected price 5 years from today (i.e. solve for P5)?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

Question 3

1. A stock’s next dividend is expected to be $2.2.  The required rate of return on stock is 12.4%, and the expected constant growth rate is 6.9%.  What is the stock’s current price?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

Question 4

1. A stock just paid a dividend of $2.6.  The required rate of return is 16.6%, and the constant growth rate is 4.3%.  What is the current stock price?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

Question 5

1. If D₁ = $3.51, g (which is constant) = 2%, and P₀ = $29.65, what is the stock’s expected dividend yield for the coming year?

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points

Question 6

1. ABC’s last dividend paid was $1, its required return is 12.6%, its growth rate is 7.8%, and its growth rate is expected to be constant in the future.  What is Sorenson’s expected stock price in 7 years, i.e., what is P7?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

Question 7

1. ABC’s stock has a required rate of return of 19%, and it sells for $67 per share.  The dividend is expected to grow at a constant rate of 7.5% per year.  What is the expected year-end dividend, D₁?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

Question 8

1. ABC Enterprises’ stock is expected to pay a dividend of $0.6 per share.  The dividend is projected to increase at a constant rate of 4.4% per year.  The required rate of return on the stock is 12.7%.  What is the stock’s expected price 3 years from today (i.e. solve for P3)?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

Question 9

1. If last dividend = $4.8, g = 4.7%, and P₀ = $67.2, what is the stock’s expected total return for the coming year?

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points

Question 10

1. ABC Company’s last dividend was $4.5.  The dividend growth rate is expected to be constant at 31% for 2 years, after which dividends are expected to grow at a rate of 6% forever.  The firm’s required return (r_s) is 12%.  What is its current stock price (i.e. solve for Po)?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

Question 11

1. The common stock of Wetmore Industries is valued at $59.8 a share. The company increases their dividend by 6.7 percent annually and expects their next dividend to be $0.6. What is the required rate of return on this stock?

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points

Question 12

1. ABC is expected to pay a dividend of $1.1 per share at the end of the year.  The stock sells for $147 per share, and its required rate of return is 19.5%.  The dividend is expected to grow at some constant rate, g, forever.  What is the growth rate (i.e. solve for g)?

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points

Question 13

1. ABC just paid a dividend of D₀ = $1.7.  Analysts expect the company’s dividend to grow by 31% this year, by 24% in Year 2, and at a constant rate of 6% in Year 3 and thereafter.  The required return on this stock is 16%.  What is the best estimate of the stock’s current market value?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

Question 14

1. If D₁ = $2, g (which is constant) = 8.2%, and P₀ = $64.7, what is the stock’s expected total return for the coming year?

Note: Enter your answer rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points

Question 15

1. ABC’s last dividend was $3.1.  The dividend growth rate is expected to be constant at 20% for 3 years, after which dividends are expected to grow at a rate of 5% forever.  If the firm’s required return (r_s) is 16%, what is its current stock price (i.e. solve for Po)?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

Question 16

1. ABC Inc., is expected to pay an annual dividend of $1.8 per share next year. The required return is 17.3 percent and the growth rate is 6.5 percent. What is the expected value of this stock five years from now?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

Question 17

1. The common stock of Connor, Inc., is selling for $31 a share and has a dividend yield of 2.2 percent. What is the dividend amount?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

Question 18

1. A stock just paid a dividend of D₀ = $2.1.  The required rate of return is r_s = 15.2%, and the constant growth rate is g = 5.4%.  What is the current stock price?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.