Question $26(1$ point$)$

A project has a beta of $1\mathrm{.}06,$ the risk$-$free rate is $2\mathrm{.}5\%,$ and the market risk premium

is $8\mathrm{.}1\%.$ The project's expected rate of return is

$\%.$

A

Question $27(1$ point$)$

Long Life Floors is expected to pay an annual dividend of $$7$ a share and plans on

increasing future dividends by $1$ percent annually. The discount rate is $15$ percent.

What will the value of this stock be $5$ years from today $($in $ dollars$)?$ $

A

Question $28(1$ point$)$

XYZ corp expects to earn $$3\mathrm{.}5$ per share next year and plow back $28\mathrm{.}57\%$ of its

earnings $($i$.$e$.,$ it expects to pay out a dividend of $$2\mathrm{.}5$ per share, representing $71\mathrm{.}43\%$

of its earnings$).$ The dividends are expected to grow at a constant sustainable growth

rate and the stocks are currently priced at $$30$ per share. How much of the stock's

$$30$ price is reflected in Present Value of Growth Opportunities $($PVGO$)$ if the

investors' required rate of return is $20\%?$