A company’s board of directors is primarily an agent of the company’s:

a. Chief Executive Officer (CEO)

b. employees

c. management

d. management and employees

e. shareholders

A stock is expected to pay a dividend of $1 at the end of the year. The required rate of return is r_s = 11%, and the expected constant growth rate is 5%. What is the stock’s value per share?

a. $16.67

b. $18.83

c. $20.00

d. $21.67

e. $23.33

Walker preferred stock pays annual dividend of $2 per share. If the required return on this stock is currently 8%, what should be the stock’s market value?

$25.00

Damon Enterprises' stock is currently sells for $25 per share. The stock’s dividend is projected to increase at a constant rate of 7% per year. The required rate of return on the stock, r_s, is 10%. What is Damon's expected price 4 years from today?

$32.77

If D₀ = $2.00 (just paid), g (which is constant) = 6%, and P₀ = $40, what is the stock’s expected total return for the coming year? (In your calculation, include D₁ is the total return, but not D₀.)

11.3%

If D₀ = $2.00, g (which is constant) = 6%, and P₀ = $40, what is the stock’s expected dividend yield for the coming year?

5.3%

Columbia preferred stock pays annual dividend of $4 per share and sells for $80 per share. What is the required return on this stock?

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5%

Lomburg Gold Inc has dwindling resources. It is expected to pay an annual dividend in one year (D₁) of $0.50 per share. Its required return is 8%. Its growth is expected to decline at a constant rate of 2% per year. Given this constant expected negative growth?

$ 5.00