# Super computer companys stock is selling for 100 per

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11. Super Computer Company's stock is selling for \$100 per share today. It is expected that, at the end of oneyear, it will pay a dividend of \$6 per share and then be sold for \$114 per share. Calculate the expected rate ofreturn for the shareholders.A.20 percentB. 15 percentC. 10 percentD. 25 percent
Accessibility: Keyboard NavigationDifficulty: Intermediate12. The valuation of a common stock today primarily depends on
Accessibility: Keyboard NavigationDifficulty: Basic13. CK Company stockholders expect to receive a year-end dividend of \$5 per share and then immediately selltheir shares for \$115 dollars per share. If the required rate of return for the stock is 20 percent, what is the currentvalue of the stock?
Accessibility: Keyboard NavigationDifficulty: Intermediate14. Deluxe Company expects to pay a dividend of \$2 per share at the end of year 1, \$3 per share at the end ofyear 2, and then be sold for \$32 per share at the end of year 2. If the required rate of return on the stock is 15percent, what is the current value of the stock?
Accessibility: Keyboard NavigationDifficulty: Intermediate15. Casino Inc. expects to pay a dividend of \$3 per share at the end of year 1 (Div1) and these dividends areexpected to grow at a constant rate of 6 percent per year forever. If the required rate of return on the stock is 18percent, what is the current value of the stock today?A.\$25B. \$50C. \$100D. \$54
16. The constant dividend growth formulaP0=Div1/(r-g) assumes .
Accessibility: Keyboard NavigationDifficulty: Intermediate17. Will Co. is expected to pay a dividend of \$2 per share at the end of year 1(Div1), and the dividends areexpected to grow at a constant rate of 4 percent forever. If the current price of the stock is \$20 per share,calculate the expected return or the cost of equity capital for the firm.

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