Answer all the 8 M.CQ with workings immediately, please (All answers must be correct) QUESTION 1

1. ABC stock is expected to pay a dividend of $2.50 next year and continue to grow at a rate of 6% thereafter. What should be the price of the stock if investors demand a 14% rate of return?

		$28.75
		$31.25
		$32.86
		$35.71
		$38.33

10 points

QUESTION 2

1. The stock of Harris Inc. recently paid a dividend of $1.42. The growth rate of dividends has been 7%. Assuming the growth rate continues, what should be the price of the stock if investors demand a 12% rate of return?

		$22.50
		$21.45
		$26.50
		$25.00
		$30.39

10 points

QUESTION 3

A stock paid a dividend of $1.64 today P(0). If the growth rate of dividends is expected to be 8% and investors demand a 15% rate of return what will be the price of the stock in year 4?

		$48.98
		$40.07
		$34.42
		$42.78
		$33.46

10 points

QUESTION 4

Ray Inc. company is not expected to pay any dividends for three years while it attempts to restructure its business. They anticipate paying $1.50 in year four and thereafter growing at a rate of 6%. What should we pay for the stock if we demand a 15% rate of return?

		$8.77
		$10.96
		$14.24
		$17.79
		$9.50

10 points

QUESTION 5

1. Harris company paid a dividend of 1.50 today. It expects dividend payments to increase by 15% every year for the next three years before resuming a normal growth of 6%. What should you pay for this stock if you demand a 16% rate of return?

		$21.24
		$19.92
		$26.65
		$24.98
		$23.25

10 points

QUESTION 6

A perpetual preferred stock pays a dividend of $3.50 per face value of $100. What is the price of the preferred stock if investors demand a 10% rate of return.

		$29.15
		$35.00
		$30.00
		$20.71
		$31.25

10 points

QUESTION 7

1. Deep River company is expected to pay a dividend of $2.80 next year. Its dividends are expected to grow at a rate of 5%. If the price of the stock is $80, what rate of return are investors demanding?

		9.00%
		8.43%
		R = (Di/P0 ) + g = 2.80/80 + .05 = 8.50%
		8.68%
		9.62%

10 points

QUESTION 8

A company has 500 shares. What is the minimum number of shares required for a minority shareholder to elect one board member out of 4 members to be elected?

		51
		101
		41
		126
		76