Question: AA Ltd. will pay a $2.50 dividend next year on its common stock. Its common stock is currently selling at $40 per share. If its

 AA Ltd. will pay a $2.50 dividend next year on its

AA Ltd. will pay a $2.50 dividend next year on its common stock. Its common stock is currently selling at $40 per share. If its dividend is expected to grow at 4.75% forever, what is the market's required return on this stock investment? Select one: O a. 6.25 percent. O b. 11.00 percent O c. 4.81 percent. O d. 10.75 percent. Currently a company has a P/E ratio of 10 times which is expected to increase to 13 times in two years. The current EPS of a company is $0.20 and expected to grow at an average rate of 15% p.a. for the next two years. What is the estimated increase in stock price after two years? Select one: O a. 62.3% O b. 49.5% O c. 34.4% O d. 71.9%

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