Question 1
0.8 out of 0.8 points
Considered alone, which of the following would increase a company's current
ratio?
Selected
Answer:
e.
An increase in accounts
receivable.
Question 2
0.8 out of 0.8 points
Which of the following would, generally, indicate
6-1
Your investment club has only two stocks in its portfolio. $20,000 is invested in a stock with a beta of 0.7 and
portfolios beta?
Answer:
Amount Invested
Beta
Weight
Stock 1
$20,000
0.7
0.36
Stock 2
$35,000
1.3
0.64
Total
$55,000
6-2
AA Industries's'
ABCs stock is currently selling for $60 per share. The firm is expected to pay a
dividend of $3.60. If the cost of equity is 9%, compute the growth rate.
P0*(er-gr)=D1
current rate
dividend
equity
growth rate
$ 60.00
$ 3.60
9%
3%
ABCIndustries will pay a dividend of $2 next year on their
commonstock. The company predicts that the dividend will increase
by 5% each yearindefnitely. What is the dividend yield if the stock is
div yiel
selling for $50 a share? What is the required rate
Expected/ Future
D1/r-g
D1
$2.50
r
10%
g
4%
Po=
41.67
P5=
$50.69
P10=
$61.68
P12=
$66.71
Suppose the company is expected to pay a di
required rate of return is 10% and the growt
the price of the stock after 5 years? after 10 y
Just Paid
Do* (1+g)/r-g
Do
r