If the answer is a whole dollar number, please report the answer in currency format, with commas and no decimals (example $10,000). If the number is negative please express it as ($10,000). If the answer is a percent - then please express it with the percentage sign and rounded-up to onedecimal. For example, if you got 7.89 as a percent - you would need to express it as 7.9%. If you got negative 7.89% you would need to express it as (7.9%).

1. Medical Corporation of America (MCA) has a current stock price of $35, and its last dividend (D0) was $2.50. In view of MCAs strong financial position, its required rate of return is 12%. If MCAs dividends are expected to grow at a constant rate in the future, what is the firms expected stock price in five years?

Choice: $43.68

Choice: $48.95

Choice: $52.10

Choice: $68.75

2. A broker offers to sell you shares of Bay Area Healthcare, which just paid a dividend of $2 per share. The dividend is expected to grow at a constant rate of 6% per year. The stocks required rate of return is 12%. What is the expected dollar dividend at the end of three years?

Choice: $2.38

Choice: $3.12

Choice: $5.00

Choice: 12%

3. A broker offers to sell you shares of Bay Area Healthcare, which just paid a dividend of $2.50 per share. The dividend is expected to grow at a constant rate of 5% per year. The stocks required rate of return is 12%. What would be a price for this stock?

Choice: $32.25

Choice: $37.50

Choice: $43.10

Choice: $45.65

4. A broker offers to sell you shares of Bay Area Healthcare, which just paid a dividend of $2 per share. The dividend is expected to grow at a constant rate of 5% per year. The stocks price is $30 a share. The stocks required rate of return is 12%. What is the expected capital gains yield at the end of the third year?

Choice: 2.5%

Choice: 5.0%

Choice: 7.5%

Choice: $30 at end of year

5. A broker offers to sell you shares of Bay Area Healthcare, which just paid a dividend of $2 per share. The stocks price is $30 a share. The dividend is expected to grow at a constant rate of 5% per year. The stocks required rate of return is 12%. What is the expected total return yield (this is the expected dividend yield + expected capital gains yield) for each of the next three years?

Choice: 8%

Choice: 10% C

hoice: 12%

Choice: 14%

6. Assume the risk-free rate is 6% and the market risk premium is 7%. The stock of Physicians Care Network (PCN) has a beta of 1.5. The last dividend paid by PCN (D0) was $2 per share. What would PCNs stock value be if the dividend were expected to grow at a constant rate of negative 5%.

Choice: $6.00

Choice: $8.84

Choice: $9.50

Choice: $17.60

7. Assume the risk-free rate is 5% and the market risk premium is 8%. The stock of Physicians Care Network (PCN) has a beta of 1.5. The last dividend paid by PCN (D0) was $2 per share. What would PCNs stock value be if the dividend were expected to grow at a constant rate of 0%.

Choice: $0.00

Choice: $5.05

Choice: $11.77

Choice: $20.40

8. Assume the risk-free rate is 6% and the market risk premium is 6%. The stock of Physicians Care Network (PCN) has a beta of 1.5. The last dividend paid by PCN (D0) was $2 per share. What would PCNs stock value be if the dividend were expected to grow at a constant rate of 10%.

Choice: $35.00

Choice: $40.00

Choice: $44.00

Choice: $50.00

9. Assume the risk-free rate is 6% and the market risk premium is 6%. The stock of Physicians Care Network (PCN) has a beta of 1.0. The last dividend paid by PCN (D0) was $2 per share. What would be the stock value if the growth rate were 10%? Do you see the difference that the Beta can make on estimated stock value (look at answer for #8 and #9)?

Choice: $50.00

Choice: $100.00

Choice: $110.00

Choice: $115.00

10. Better Life Nursing Home, Inc. has maintained a dividend payment of $3 per share for many years. The same dollar dividend is expected to be paid in future years (or perpetuity). If investors require a 12% rate of return on investments of similar risk, determine the value of the companys stock.

Choice: $15.00

Choice: $25.00

Choice: $33.33

Choice: $36.20

11. Lucas Clinics last dividend D0 was $1.50. Its current equilibrium stock price is $15.75, and its expected growth rate is a constant 6%. If the stockholders required rate of return is 16%, what is expected total return yield (dividend yield and capital gains yield) for the coming year?

Choice: 5.0%

Choice: 10.0%

Choice: 12.5%

Choice: 16.0%

12. St John Medical, a surgical equipment manufacturer, has been hit hard by increased competition. Analysts predict that earnings and dividends will decline at a rate of 5% annually into the foreseeable future. If the firms last dividend (D0) was $2.50 and the investors required rate of return is 16%, what will be the companys stock price in three years?

Choice: $6.15

Choice: $9.70

Choice: $20.00

Choice: $12.45

13. Humans Inc.s last dividend (D0) was $1.50, and its earnings and dividends are expected to increase at a constant growth rate of 4%. Humanas market beta is 1.8. If the current risk-free rate is 5% and the required rate of return on the market portfolio is 12%, what is the companys current expected stock price?

Choice: $7.50

Choice: $9.58

Choice: $11.47

Choice: $17.89