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| Teaching Since: | Apr 2017 |
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| Questions Answered: | 3232 |
| Tutorials Posted: | 3232 |
MBA,MCS,M.phil
Devry University
Jan-2008 - Jan-2011
MBA,MCS,M.Phil
Devry University
Feb-2000 - Jan-2004
Regional Manager
Abercrombie & Fitch.
Mar-2005 - Nov-2010
Regional Manager
Abercrombie & Fitch.
Jan-2005 - Jan-2008
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1) Suppose you know that a companyAc€?cs stock currently sells for $60 per share and the required return on the stock is 10 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If itAc€?cs the companyAc€?cs policy to always maintain a constant growth rate in its dividends, what is the current dividend per share?
Current dividend per share: ??
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2) An investment project has annual cash inflows of $5,200, $3,000, $4,300, and $3,500, for the next four years, respectively. The discount rate is 13 percent. |
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a) What is the discounted payback period for these cash flows if the initial cost is $4,900? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| Discounted payback period........ | years |
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b) What is the discounted payback period for these cash flows if the initial cost is $7,000? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| Discounted payback period | years |
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c) What is the discounted payback period for these cash flows if the initial cost is $10,000? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16 |
Â
| Discounted payback period | years |
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3) A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the following cash flows: |
| Year | Cash Flow | ||
| 0 | Ac€?o$ | 28,900 |  |
| 1 | Â | 12,900 | Â |
| 2 | Â | 15,900 | Â |
| 3 | Â | 11,900 | Â |
| Â | |||
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If the required return is 14 percent, what is the IRR for this project? IRR= ?? |
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