Question : 11.Smith Construction, Inc. just paid a $2.78 dividend. The dividend : 1325674

 

 

11.Smith Construction, Inc. just paid a $2.78 dividend. The dividend is expected to grow by 4% each year for the next three years. After that the company will never pay another dividend ever again. If your required return on the stock investment is 10%, what should the stock sell for today?

a.$7.46

b.$28.91

c.$46.33

d.$15.63

 

 

 

12.Smith Construction, Inc. is expected to pay a $2.78 dividend next year. The dividend is expected to grow by 4% each year for the next three years. After that the company will never pay another dividend ever again. If your required return on the stock investment is 10%, what should the stock sell for today?

a.$7.46

b.$28.91

c.$35.06

d.$9.31

 

 

 

13.Miller Juice, Inc. is not paying a dividend right now, but is expected to pay a $4.56 dividend two years from now. Investors expect that dividend to grow by 4% every year forever. If the required return on the stock investment is 14%, what should be the price of Miller Juice stock today?

a.$53.69

b.$36.49

c.$47.42

d.$43.84

 

 

 

14.Miller Juice, Inc. just paid a $3 dividend. The company is expected to pay a $3.50 dividend next year and a $4 dividend in two years. After that, dividends are expected to grow at 5% forever. If investors require a return of 12% on the investment, what should Miller Juice stock sell for today?

a.$54.15

b.$49.63

c.$57.15

d.$60.00

 

 

 

15.Miller Juice, Inc. is expected to pay a $3.00 dividend next year and a $4 dividend in two years. After that, dividends are expected to grow at 5% forever. If investors require a return of 12% on the investment, what should Miller Juice stock sell for today?

a.$60.00

b.$54.15

c.$49.39

d.$53.70

 

 

 

 

16.Miller Juice traditionally pays out 35% of its earnings as dividends. Last year Miller’s earnings available for common stockholders were $256 million and the book value of its equity was $678 million. What is Miller’s growth rate?

a.24.54%

b.35.00%

c.37.76%

d.13.22%

 

 

 

17.Miller Juice traditionally retains 65% of its earnings for future investments. Last year Miller’s return on equity was 15%. What is Miller’s growth rate?

a.15.00%

b.9.75%

c.5.25%

d.18.38%

 

 

 

18.Bavarian Sausage free cash flow for the current year is $6,750,000 and investors believe that the company’s free cash flow will grow by 5% annually forever. If Bavarian sausage’s weighted average cost of capital is 15%, what is their enterprise value?

a.$67,500,000

b.$85,350,000

c.$56,780,000

d.$70,875,000

 

 

 

19.Bavarian Sausage’s enterprise value is $75,000,000, the market value of its debt is $23,000,000 and the company does not have any preferred stock outstanding. If the company has 3,500,000 shares outstanding, what should be Bavarian Sausage’s stock price?

a.$21.43

b.$14.86

c.$28.00

d.$6.57

 

 

 

 

20.Bavarian Sausage’s enterprise value is $75,000,000, the market value of its debt is $23,000,000 and the market value of its preferred stock is $5,000,000. If the company has 3,500,000 shares outstanding, what should be Bavarian Sausage’s stock price?

a.$14.86

b.$21.43

c.$13.43

d.$6.57

 

 

 

 

 

21.Bavarian Sausage is expected to pay a $1.57 dividend next year. If the required return on the stock investment is 14%, and the stock currently sells for $34.37, what is the implied dividend growth rate for this company?

a.6.37%

b.9.43%

c.12.68%

d.15.76%

 

 

 

22.Bavarian Sausage just paid a $1.57 dividend. If the required return on the stock investment is 14%, and the stock currently sells for $34.37, what is the implied dividend growth rate for this company?

a.9.02%

b.6.39%

c.12.68%

d.9.43%