1.An analyst has compiled the following financial data for ABC, Inc.

What is the value of ABC, Inc.'s stock price using the assumptions contained in scenario 4?

A)   $22.22.

B)   $18.52.

C)   $20.54.

D)   $26.66.

2.If a stock expects to pay dividends of $2.30 per share next year, what is the value of the stock if the required rate of return is 12 percent and the expected growth rate in dividends is 4 percent?

A)   $19.17.

B)   $28.75.

C)   $29.90.

D)   $57.50.

3.An investor projects that a firm will pay a dividend of $1.00 next year and $1.20 the following year. At the end of the second year, the expected price of the shares is $22.00. If the required return is 14 percent, what is the current value of the firm’s shares?

A)   $18.73.

B)   $15.65.

C)   $17.56.

D)   $19.34.

4.An investor projects that a firm will pay a dividend of $1.25 next year, $1.35 the second year, and $1.45 the third year. At the end of the third year, she expects the asset to be priced at $36.50. If the required return is 12 percent, what is the current value of the shares?

A)   $31.16.

B)   $29.21.

C)   $32.78.

D)   $34.34.

答案和详解如下：

1.An analyst has compiled the following financial data for ABC, Inc.

ABC, Inc. Valuation Scenarios
Item	Scenario 1	Scenario 2	Scenario 3	Scenario 4
Year 0 Dividends per Share	$1.50	$1.50	$1.50	$1.50
Long-term Treasury Bond Rate	4.0%	4.0%	5.0%	5.0%
Expected Return on the S& 500	12.0%	12.0%	12.0%	12.0%
Beta	1.4	1.4	1.4	1.4
g (growth rate in dividends)	0.0%	3.0%	Years 1-3, g=12.0% After Year 3, g=3.0%	Year 1, g=20% Year 2, g=18% Year 3, g=16% Year 4, g=9% Year 5, g=8% Year 6, g=7% After Year 6, g=4%

What is the value of ABC, Inc.'s stock price using the assumptions contained in scenario 4?

A)   $22.22.

B)   $18.52.

C)   $20.54.

D)   $26.66.

The correct answer was A)

The required rate of return is (r) = 0.05 + 1.4(0.12 - 0.05) = 0.148

The future dividends are predicted as the following:

Year	Dividend
0	1.50
1	1.50 * 1.2 = 1.80
2	1.80 * 1.18 =2.124
3	2.124 * 1.16 = 2.464
4	2.464 * 1.09 = 2.686
5	2.686 * 1.08 = 2.900
6	2.901 * 1.07 = 3.103
7	3.103 * 1.04 = 3.227

Now discount the dividend stream to get the value per share. Use the Gordon growth model to discount the constant growth after period 6. Value per share = 1.8/(1.148) + 2.124/(1.148)² + 2.464/(1.148)³ + 2.686/(1.148)⁴ + 2.900/(1.148)⁵ + 3.103/(1.148)⁶ + 3.227/(0.148 - 0.04)(1.148)⁶ = 22.22.

2.If a stock expects to pay dividends of $2.30 per share next year, what is the value of the stock if the required rate of return is 12 percent and the expected growth rate in dividends is 4 percent?

A)   $19.17.

B)   $28.75.

C)   $29.90.

D)   $57.50.

The correct answer was B)

Using the Gordon growth model, the value per share = DPS₁/(r-g) = 2.30/(0.12-0.04) = $28.75.

3.An investor projects that a firm will pay a dividend of $1.00 next year and $1.20 the following year. At the end of the second year, the expected price of the shares is $22.00. If the required return is 14 percent, what is the current value of the firm’s shares?

A)   $18.73.

B)   $15.65.

C)   $17.56.

D)   $19.34.

The correct answer was A)

The current value of the shares is $18.73:

V₀ = $1.00/1.14 + $1.20/(1.14)² + $22.00/(1.14)² = $18.73

4.An investor projects that a firm will pay a dividend of $1.25 next year, $1.35 the second year, and $1.45 the third year. At the end of the third year, she expects the asset to be priced at $36.50. If the required return is 12 percent, what is the current value of the shares?

A)   $31.16.

B)   $29.21.

C)   $32.78.

D)   $34.34.

The correct answer was B)

The current value of the shares is $29.21:

V₀ = $1.25/(1.12) + $1.35/(1.12)² + $1.45/(1.12)³ + $36.50/(1 + 0.12)³ = $29.21