SA6.1.docx - Question 1 7 out of 7 points Bercedes Menz Inc...

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Question 1 7 out of 7 points Bercedes Menz Inc. just paid a dividend of $3.00 per share. If dividends have been growing at a constant rate of 4%, and you require an 11 percent return, what is the value of the stock? Selected Answer: $44. 57 Question 2 7 out of 7 points Motors Gen. Corp. just paid a dividend of $5.00 per share. If dividends have been declining by 7% per year and you require a rate of return of 12%, what is the value of the stock? Selected Answer: $24. 47 Question 3 7 out of 7 points Fast Growth Company just paid a dividend of $2.15 per share. Dividends are expected to grow at a constant rate of 18% per year. If you require a 20 percent return on stocks in this risk class, what is the value of the stock? Selected Answer: $126. 85 Question 4 0 out of 7 points Maxx Office Company will pay no dividends for the next 4 years. In year 5, it will pay a dividend of $9 and maintain a constant growth of 7% thereafter. If you require a 14% rate of return on investments in this risk class, how much is the stock worth to you? Selected Answer: $82. 95 Question 5 7 out of 7 points Peach Company and Plum Corp. are in the same risk class. Peach pays a constant dividend of $5.50 per year, and is selling in the market for $42. Plum just paid a dividend of $4.00 per share. If Plum’s dividends are growing at a constant rate of 9% per year, what is the market price of Plum stock? Selected Answer: $106. 47 Question 6 0 out of 7 points
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Hathshire Berkaway Company stock is selling in the market for $27. The company pays dividends which grow at a constant rate of 4%. If the
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