National Advertising just paid a dividend of D0 = $0.75 per share, and that dividend is expected to grow at a constant rate of 6.50% per year in the future. The company's beta is 1.25, the required return on the market is 10.50%, and the risk-free rate is 4.50%. What is the company's current stock price?
A. $14.52
B. $14.89
C. $15.26
D. $15.64
E. $16.03
Answer: A
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Will has been very meticulous in managing his employees. They have come to believe that he will do exactly what he says he will when he interacts with them. This is the concept of ______.
A. sincerity B. trust C. purpose D. assurance
A company is contemplating investing in a new piece of manufacturing machinery. The amount to be invested is $100,000. The present value of the future cash flows at the company's desired rate of return is $105,000. The IRR on the project is 12%. Which of the following statements is true?
A) The project should not be accepted because the net present value is negative. B) The desired rate of return used to calculate the present value of the future cash flows is less than 12%. C) The desired rate of return used to calculate the present value of the future cash flows is more than 12%. D) The desired rate of return used to calculate the present value of the future cash flows is equal to 12%.
Magnum Corporation had 60,000 of its $3 par common stock issued before its recent 3-for-1 stock split. The market price of the stock was $30 per share before the split. Which of the following is true as a result of the split?
A) There were 20,000 shares of common stock issued after the split. B) The balance in the common stock account increased to $180,000. C) The market price of the stock was not affected. D) The par value of the stock decreased to $1 per share.
Choose the statement that is not a reason a global strategy contrasts sharply with a multidomestic strategy.
A. In globally competitive industries, the power and strength of a company's strategy and resource capabilities in one country significantly enhance its competitiveness in other country markets. B. In global competition, rivals vie for worldwide market leadership. C. In global competition, a firm's overall competitive advantage (or disadvantage) grows out of its entire worldwide operations. D. In global competition, there's more cross-country variation in industry conditions and competitive forces than there is in industries where multidomestic competition prevails. E. In global competition, many of the same rival companies compete against each other in many different countries, but especially so in countries where sales volumes are large and where having a competitive presence is strategically important to building a strong global position in the industry.