SF004 Quiz 3.docx

# SF004 Quiz 3.docx - SF004 Quiz 3 1 1 point The future...

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SF004 Quiz 3 1 / 1 point The future earnings, dividends, and common stock price of Dawson Technologies are expected to grow 6% per year. Dawson’s current stock price is \$27.50 per share. Its last dividend was \$1 per share and it will pay \$1.07 per share at the end of the year. Using the Discounted Cash Flow (DCF) method, what is the company’s cost of common equity? Question options: A) 10.7% B) 8.3% C) 9.2% D) 9.0% E) 9.6% Vie w Feedbac k 1 / 1 point Kerry, Inc. has a target capital structure of 60% common equity and 40% debt to fund its \$5 billion in operating assets. The company has a WACC of 12%, a before tax cost of debt of 9% and a tax rate of 35%. The company’s retained earnings are adequate to provide the common equity portion of its capital budget. Its expected dividend (D1) next year is \$4.00 and the current stock price is \$47. What is the company’s expected growth rate? Question options: A) 5.5% B) 7.6% C) 8.1%

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D) 9.3% E) 4.4% Vie w Feedbac k 1 / 1 point Project classifications are used in the capital budgeting process in the following ways: Question options: A) Indicate the amount of analysis required to evaluate a given project.

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