1.

Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 18 percent for the next 3 years, with the growth rate falling off to a constant 6 percent thereafter.

If the required return is 10 percent and the company just paid a $3.60 dividend. what is the current share price?

Multiple Choice

• $132.82

• $125.77

• $119.51

• $127.61

• $130.21

2. The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 21 percent a year for the next 4 years and then decreasing the growth rate to 6 percent per year. The company just paid its annual dividend in the amount of $2.10 per share. What is the current value of one share of this stock if the required rate of return is 7.60 percent?

Multiple Choice

• $235.95

• $222.48

• $298.23

• $300.33

• $233.85

3.

An investment project has annual cash inflows of $4,400, $5,500, $6,300 for the next four years, respectively, and $7,600, and a discount rate of 11 percent.

What is the discounted payback period for these cash flows if the initial cost is $7,500?

Multiple Choice

• 1.29 years

• 2.54 years

• 3.58 years

• 1.79 years

• 0.79 years