FIN 571 Course Great Wisdom / tutorialrank.com FIN 571 Course Great Wisdom / tutorialrank.com | Page 7

Ancient Industries just paid a dividend of $1.03 a share. The company
announced today that it expects to pay $.90 a share next year and a
final liquidating dividend of $18.44 in two years. What is one share of
this stock worth today if the required rate of return is 16 percent?

28.The relationship between nominal rates, real rates, and inflation is
known as the:
Gordon growth model.
term structure of interest rates.
Miller and Modigliani theorem.
interest rate risk premium.
Fisher effect.

29.What would be the maximum an investor should pay for the
common stock of a firm that has no growth opportunities but pays a
dividend of $1.36 per year? The required rate of return is 12.5
percent.

31.A newspaper listing of bond prices has an "Asked yield" column.
This yield is based on the asked price and represents the:
coupon rate.
difference between the current yield and the yield to maturity.