Finance Problems

Question 1

· The common stock of Connor, Inc., is selling for $83 a share and has a dividend yield of 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 2

· If D1 = $2.7, g (which is constant) = 6.5%, and P0 = $76.4, 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 3

· 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 (rs) 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 4

· ABC is expected to pay a dividend of $5.5 per share at the end of the year. The stock sells for $189 per share, and its required rate of return is 14.4%. 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 5

· ABC Company's last dividend was $4.9.  The dividend growth rate is expected to be constant at 25% for 2 years, after which dividends are expected to grow at a rate of 5% forever.  The firm's required return (rs) is 17%.  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 6

· ABC Inc., is expected to pay an annual dividend of $1.6 per share next year. The required return is 15 percent and the growth rate is 5.8 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 7

· A stock just paid a dividend of $1.6.  The required rate of return is 16.4%, and the constant growth rate is 3.5%.  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 8

· A stock is expected to pay a dividend of $2.4 at the end of the year.  The required rate of return is rs = 16.1%, and the expected constant growth rate is g = 6.3%.  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 9

· If last dividend = $3.1, g = 3.4%, and P0 = $67.7, 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 10

· A stock's next dividend is expected to be $0.7.  The required rate of return on stock is 10%, and the expected constant growth rate is 6%.

·   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 11

· ABC’s last dividend paid was $2.1, its required return is 19.3%, its growth rate is 6%, 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 12

· A stock just paid a dividend of D0 = $1.9.  The required rate of return is rs = 10.1%, and the constant growth rate is g = 6.5%.  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 13

· If D1 = $3.31, g (which is constant) = 2%, and P0 = $67.26, 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 14

· The common stock of Wetmore Industries is valued at $21.3 a share. The company increases their dividend by 3.3 percent annually and expects their next dividend to be $2.9. 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 15

· ABC Enterprises' stock is expected to pay a dividend of $1 per share.  The dividend is projected to increase at a constant rate of 3.6% per year.  The required rate of return on the stock is 19.9%.  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 16

· ABC just paid a dividend of D0 = $3.  Analysts expect the company's dividend to grow by 32% this year, by 20% in Year 2, and at a constant rate of 6% in Year 3 and thereafter.  The required return on this stock is 14%.  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 17

· ABC's stock has a required rate of return of 19.3%, and it sells for $74 per share.  The dividend is expected to grow at a constant rate of 3.6% 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 18

· ABC Enterprises' stock is currently selling for $39 per share.  The dividend is projected to increase at a constant rate of 3.7% 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