Author Question: The next dividend on Sciorra stock is expected to be 3.10 per share. Dividends are expected to grow ... (Read 129 times)

leo leo · **on:** Jul 10, 2018

The next dividend on Sciorra stock is expected to be 3.10 per share. Dividends are expected to grow at a constant rate of 5 indefinitely. What should the current share price be if Sciorra investors require a return of 15?

A) 32.55
B) 31.00
C) 20.67
D) 21.70
E) 62.00

Question 2

The expected return on the market is 10, the risk free rate is 5 and Black Magic Cosmetics Inc. has a beta of -1. What is the expected return for Black Magic Cosmetics Inc.?

A) -10
B) -5
C) 0
D) 5
E) 7.5