(TCO D) A stock just paid a dividend of D0 = $1.50. The required rate of return is rs = 10.1%, and the constant growth rate is g = 4.0%.

(TCO D) A stock just paid a dividend of D0 = $1.50. The required rate of return is rs = 10.1%, and the constant growth rate is g = 4.0%. is the current stock price? (Points : 10) (TCO D) If D0 = $2.25, g (which is constant) = 3.5%, and P0 = $50, what is the stock’s expected dividend yield for the coming year? (Points : 10) (TCO D) Rebello’s preferred stock pays a dividend of $1.00 per quarter, and it sells for $55.00 per share. is its effective annual (not nominal) rate of return? (Points : 10) [6:33:08 PM] Amanda L Butler (TCO E) Which of the following is NOT a capital component when calculating the weighted average cost of capital (WACC) for use in capital budgeting? (Points : 10) (TCO E) Duval Inc. uses only equity capital, and it has two equally-sized divisions. Division A’s cost of capital is 10.0%, Division B’s cost is 14.0%, and the corporate (composite) WACC is 12.0%. All of Division A’s projects are equally risky, as are all of Division B’s projects. However, the projects of Division A are less risky than those of Division B. Which of the following projects should the firm accept? (Points : 10) (TCO D) Assume that you are a consultant to Broske Inc., and you have been provided with the following data: D1 = $0.67; P0 = $27.50; and g = 8.00% (constant). is the cost of common from retained earnings based on the DCF approach? (Points : 10) (TCO F) Cornell Enterprises is considering a project that has the following cash flow and WACC data. is the project’s NPV? Note that a project’s expected NPV can be negative, in which case it will be rejected. (TCO F) Simkins Renovations Inc. is considering a project that has the following cash flow data. is the project’s IRR? Note that a project’s IRR can be less than the WACC (and even negative), in which case it will be rejected. (TCO F) Masulis Inc. is considering a project that has the following cash flow and WACC data. is the project’s discounted payback? (TCO H) Temple Corp. is considering a new project whose data are shown below. The equipment that would be used has a three-year tax life, would be depreciated by the straight-line method over its three-year life, and would have a zero salvage value. No new working capital would be required. Revenues and other operating costs are expected to be constant over the project’s three-year life. is the project’s NPV?

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