Question: 7.a b. c. d. Analysts predict that Ottawa Toys will pay dividends of $3 per share in year 1, $3.5 per share in year 2,

7.a

dividends of $3 per share in year 1, $3.5 per share in

expects its dividend to decrease by 5% per year for three years

Analysts predict that Ottawa Toys will pay dividends of $3 per share in year 1, $3.5 per share in year 2, and $3.8 per share in year 3. The firm then expects its dividend to decrease by 5% per year for three years (year 4,5,6). Thereafter the dividends will grow at 6% indefinitely. The required rate of return is 12%. What is the value of the stock today? 29.2 32.7 38.6 43.2 None of the above. The firm-level FCF of New Media Inc. is estimated to be $9.8 million. The company has 2.1 million shares outstanding. You also now that the average P/FCF multiple for comparable companies is 12.9. Using a relative valuation approach, what is the estimated price of a share of New Media Inc Stock? $60.20 $93.40 $126,40 $175.10 None of the above. Which one of the following would provide the best indication that a portfolio is being effectively diversified? An increase in the portfolio beta A decrease in the portfolio beta An increase in the portfolio rate of return A decrease in the portfolio standard deviation None of the above. The payback method: O is the amount of time it takes for a project to recoup its profits. O is the best method for evaluating complex projects. fails to explicitly consider the time value of money. O is never used by businesses today, None of the above

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