Test 2 - Review

# Test 2 - Review - 1) Fundamental analysis, when i t comes...

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1) Fundamental analysis , when it comes to dividends 2) Which of the following is not an example of fiscal policy Fed purchases of treasury security (This is monetary policy) 3) Currency in your country is depreciating this should stimulate export and discourage import 4) if the interest rate increase business investment expenditure are likely to decrease . – Decrease 5) Constant growth dividend discount model can be used only when : growth rate is less than or equal to the required return Growth rate is less than the required return 6) required return on a stock ROE = 12% Earning is \$5 Payback ratio 60% So, D1 = 5 * .40 =

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10 7.2 = 71.42/5 = 14.29 7) a firm is planning on paying its first divided of \$2 in three years. After that the dividend per year Dividend start in year 3 = \$2 3:34 8) Gott and Perrin, Inc. 9) Todd Mountain Development Corporation is expected to pay a dividend of \$3.00 in the upcoming year. Dividends are expected to grow at 8 % Find the required return 10) A firm has a stock of \$55 per share and a P/E of 75. If you buy the stock at this P/ E and earnings fail to grow at all, how long P=55
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## Test 2 - Review - 1) Fundamental analysis, when i t comes...

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