3. A stock produced returns of 4.6 percent, 11.9 percent, -23.2 percent, 0.9 percent, and 16.7...

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3. A stock produced returns of 4.6 percent, 11.9 percent, -23.2percent, 0.9 percent, and 16.7 percent over the past five years.What is the geometric average return on this stock for this timeperiod? a. 11.17 percent b. 1.14 percent c. 0.74 percent d. 1.43percent e. 5.28 percent
4. A stock had an average return of 13.7 percent compared to anaverage return on U.S. Treasury bills of 3.8 percent for the sametime period. What is the equity risk premium on this stock? a.17.50 percent b. 13.70 percent c. 3.61 percent d. 9.90 percent e.7.73 percent
6. Bugatti, Inc is expected to pay a dividend of $2.40 next yearand its current stock price is $48. The discount rate for thecompany is 11%. If the market expects Bugatti’s dividends to growat a constant rate forever, then the growth rate must be _____% a.5 b. 6 c. 7 d. 8 e. 9 16.
16. What is the current price of a share of stock that isexpected to pay a dividend (i.e., D1) of $4.10 per share exactlyone year from today, if the expected growth rate in the company’searnings and dividends is expected to be 4.6% per year forever andthe required rate of return for the stock is 16%?
17. What is the required rate of return (assuming equilibrium)of a share of stock that just paid a dividend (i.e., D0) of $0.75per share, assuming that all future dividends are expected to growat a rate of 4.2 percent per year forever? The stock currentlysells for $24.18 per share.
18. What is the constant growth rate in the dividends (forever)of a share of stock that currently sells for $230.44, if thedividend just paid (i.e., D0) equals $22.10 and the required rateof return for the stock is 18.8%?

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3. A stock produced returns of 4.6 percent, 11.9 percent, -23.2percent, 0.9 percent, and 16.7 percent over the past five years.What is the geometric average return on this stock for this timeperiod? a. 11.17 percent b. 1.14 percent c. 0.74 percent d. 1.43percent e. 5.28 percent4. A stock had an average return of 13.7 percent compared to anaverage return on U.S. Treasury bills of 3.8 percent for the sametime period. What is the equity risk premium on this stock? a.17.50 percent b. 13.70 percent c. 3.61 percent d. 9.90 percent e.7.73 percent6. Bugatti, Inc is expected to pay a dividend of $2.40 next yearand its current stock price is $48. The discount rate for thecompany is 11%. If the market expects Bugatti’s dividends to growat a constant rate forever, then the growth rate must be _____% a.5 b. 6 c. 7 d. 8 e. 9 16.16. What is the current price of a share of stock that isexpected to pay a dividend (i.e., D1) of $4.10 per share exactlyone year from today, if the expected growth rate in the company’searnings and dividends is expected to be 4.6% per year forever andthe required rate of return for the stock is 16%?17. What is the required rate of return (assuming equilibrium)of a share of stock that just paid a dividend (i.e., D0) of $0.75per share, assuming that all future dividends are expected to growat a rate of 4.2 percent per year forever? The stock currentlysells for $24.18 per share.18. What is the constant growth rate in the dividends (forever)of a share of stock that currently sells for $230.44, if thedividend just paid (i.e., D0) equals $22.10 and the required rateof return for the stock is 18.8%?