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##### Finance Multiple Choice Questions

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Question;Question 1A stock's next dividend is expected to be \$0.9. The required rate of return on stock is 11.3%, and the expected constant growth rate is 7.6%. What is the stock's current price?a. 19.28b. 24.32c. 8.28d. 23.67Question 2A stock is expected to pay a dividend of \$0.5 at the end of the year. The required rate of return is rs = 9.6%, and the expected constant growth rate is g = 6.1%. What is the stock's current price?a. 4.98b. 6.92c. 11.59d. 14.29Question 3If last dividend = \$4.6, g = 3.8%, and P0 = \$77.3, what is the stock?s expected total return for the coming year?a. 9.98b. 5.38c. 7.37d. 4.84Question 4The common stock of Connor, Inc., is selling for \$25 a share and has a dividend yield of 4 percent. What is the dividend amount?a. 7b. 2c. 3d. 1Question 5A stock just paid a dividend of \$1.7. The required rate of return is 9.6%, and the constant growth rate is 4.8%. What is the current stock price?a. 37.12b. 64.24c. 23.96d. 15.98Question 6The common stock of Wetmore Industries is valued at \$60.8 a share. The company increases their dividend by 3.4 percent annually and expects their next dividend to be \$4.1. What is the required rate of return on this stock?a. 5.91b. 8.46c. 10.14d. 15.82Question 7ABC's last dividend was \$3.4. The dividend growth rate is expected to be constant at 27% for 3 years, after which dividends are expected to grow at a rate of 7% forever. If the firm's required return (rs) is 16%, what is its current stock price (i.e. solve for Po)?a. 47.97b. 65.31c. 37.85d. 48.91Question 8ABC's stock has a required rate of return of 17.2%, and it sells for \$34 per share. The dividend is expected to grow at a constant rate of 7.2% per year. What is the expected year-end dividend, D1?a. 1.78b. 2.74c. 3.94d. 3.40Question 9A stock just paid a dividend of D0 = \$1.1. The required rate of return is rs = 9.2%, and the constant growth rate is g = 6%. What is the current stock price?a. 36.44b. 18.3c. 10.89d. 9.16Question 10ABC just paid a dividend of D0 = \$0.6. Analysts expect the company's dividend to grow by 34% this year, by 24% in Year 2, and at a constant rate of 7% in Year 3 and thereafter. The required return on this stock is 15%. What is the best estimate of the stock?s current market value?a. 16.86b. 11.54c. 9.87d. 8.35

Paper#49716 | Written in 18-Jul-2015

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