ot ou ingc dhidends grow at a constant rate,the capital gains yield equals which
ID: 2787614 • Letter: O
Question
ot ou ingc dhidends grow at a constant rate,the capital gains yield equals which one the following? a. Total yeld b. Current discount rate Market rate of return Dividend yield d. e. Dividend growth rate The common stock of Mid-Towne Movers is selling for $33 a share and has a 9 percent rate annual dividend? t rate of growth rate of the dividends is 1 percent annually. What is the amount of the next b. d. e $2.70 a. $2.58 $2.61 $2.64 $2.67 11. You are considering the following two mutually exclusive projects. The crossover rate is and projectshould be accepted at an 18 percent discount rate. Year Project A $29,000 16,000 218,000 ProjectB $29,000 15,00 15,000 -17,000 a. b. c. d. e. 14.92 percent; B 14.92 percent; A 15.23 percent; B 17.54 percent; A 17.54 percent; B 12. The Black Horse is currently considering a project that will produce cash inflows of $12,000 a year for three years followed by $6,500 in year four. The cost of the project is $38,000. What is the profitability index if the discount rate is 7 percent? a. 0.96 b. 0.99 1.09 1.12 C. d.Explanation / Answer
9. Option b
10. po =( D0 (1+g) )/ke - g
So 33=D0 (1+.01) / .09- .01
or 2.64/1.01 = Do
Do = 2.61 $ so answer is b
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