1．CAB Inc. just paid a current dividend of $3.00, the forecasted growth is 9 percent, declining over four years to a stable 6 percent thereafter, and the current value of the firm’s shares is $50, what is the required rate of return?

A)   9.8%.

B)   12.7%.

C)   10.5%.

D)   8.6%.

2．Given that a firm’s current dividend is $2.00, the forecasted growth is 7 percent, declining over three years to a stable 5 percent thereafter, and the current value of the firm’s shares is $45, what is the required rate of return?

A)   7.8%.

B)   9.8%.

C)   10.5%.

D)   8.6%.

3．Given that a firm’s current dividend is $2.00, the forecasted growth is 7 percent for the next two years and 5 percent thereafter, and the current value of the firm’s shares is $54.50, what is the required rate of return?

A)   Can’t be determined.

B)   8%.

C)   10%.

D)   9%.

答案和详解如下：

1．CAB Inc. just paid a current dividend of $3.00, the forecasted growth is 9 percent, declining over four years to a stable 6 percent thereafter, and the current value of the firm’s shares is $50, what is the required rate of return?

A)   9.8%.

B)   12.7%.

C)   10.5%.

D)   8.6%.

The correct answer was B)

The required rate of return is 12.7%.

r = ($3/$50)[(1 + 0.06) + (4/2) (0.09 – 0.06)] + 0.06 = 12.7%

Since the H-model is an approximation model, it is possible to solve for r directly without iteration.

2．Given that a firm’s current dividend is $2.00, the forecasted growth is 7 percent, declining over three years to a stable 5 percent thereafter, and the current value of the firm’s shares is $45, what is the required rate of return?

A)   7.8%.

B)   9.8%.

C)   10.5%.

D)   8.6%.

The correct answer was B)

The required rate of return is 9.8%.

r = ($2/$45) [(1 + 0.05) + (3/2)(0.07 – 0.05)] + 0.05 = 0.0980

Since the H-model is an approximation model, it is possible to solve for r directly without iteration.

3．Given that a firm’s current dividend is $2.00, the forecasted growth is 7 percent for the next two years and 5 percent thereafter, and the current value of the firm’s shares is $54.50, what is the required rate of return?

A)   Can’t be determined.

B)   8%.

C)   10%.

D)   9%.

The correct answer was D)

The equation to determine the required rate of return is solved through iteration.

$54.50 = $2(1.07) / (1 + r) + $2(1.07)² / (1 + r)² + {[$2(1.07)²(1.05)] / (r - 0.05)} / [(1 + r)²

Through iteration, r = 9%