60.1K

Verified Solution

Link Copied!

Question 13 Which of the following statements is most correct? Not yet answered Points out of 5 Flag question O Select one: O a Other things equal, the lower the dividends, the higher the stock price. Other things equal, the lower the market value of debt, the lower the value of equity. Oc. Other things equal, the lower the required rate of return, the higher the stock price. O d. Other things equal, the longer the investment holding period, the lower the stock price. Oe Other things equal, the higher the dividend growth rate, the lower the stock price. Question 14 Not yet answered Thames Inc.'s most recent dividend was $2.40 per share. The dividend is expected to grow at 6% per year. The T-bill rate is 5% and the market risk premium is 10%. The company's beta is 1.3. What should be the expected price of the stock two years later? Points out of 5 Flag question Select one: O a $23.82 Ob $64.24 $26.71 Od $72.14 Oe $68.06 Question 15 Not yet Thames Inc.'s last dividend was $2 per share. The dividend is expected to grow at 5% per year. The stock currently sells for $26.25 per share. What is the estimated (predicted) rate of return of the stock today? answered Points out of 5 Flag question Select one: O a. 13.0% Ob 5.2% . 16.7% Od 11.0% . 12.6%

Answer & Explanation Solved by verified expert

See Answer