31. ABC is expected to pay a dividend per share of $2.20 next year. Dividends are expected to grow by 5% forever. What is the required rate if the current stock price is $50?

A 2.11%

B 4.21%

C 5.01%

D 9.14%

E None of the above

32 What is the fair value of a business that promises a $14,000 cash flow every year for the next 5 years, assuming a 12% required rate?

A $50,266.87

B $50.466.87

C $60,666.87

D $60,766.87

E None of the above

33 If you purchased the above business for $60,000, then your NPV is and you value

A -$1,500; destroyed

B -$9,533.13; created

C $666.87.13; created

D $766.87.23; created

E None of the above

34. What are our firms operating cash flows for a single year. using the following data:

Sales: $9,000

All costs excluding depreciation: 20% of sales

Annual depreciation expense: $3,000

Tax rate: 21%

Purchase price of asset: $2,200

Net working capital needed: $1,200

A $4,200

B $6,200

C $6,218

D $6,318

E None of the above

35. What is our firms initial investment, using the above data.

A $1,000

B $2,200

C $3,400

D $6,400

E None of the above