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Author Question: ABC Company has been growing at a 10 rate, and it just paid a dividend of Do= 3.00. Due to a new ... (Read 79 times)

james9437

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on: Jul 10, 2018
ABC Company has been growing at a 10 rate, and it just paid a dividend of Do= 3.00. Due to a new product, ABC expects to achieve a dramatic increase in its short-run growth rate, to 20 annually for the next 2 years.
 
  After this time growth is expected to return to the long-run constant rate of 10. The company's beta is 2.0, the required return on an average stock is 11, and the risk free rate is 7. What should the dividend yield (D1/Po) be today? (Round to the nearest whole percent.)
  A) 4
  B) 5
  C) 10
  D) 8
  E) 2

Question 2

Which of the following is NOT a source of unsecured short-term credit?
 
  A) trade credit B) commercial paper
  C) floating lien D) a line of credit


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6ana001

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Reply #1 on: Jul 10, 2018
Answer to Question 1

B

Answer to Question 2

C


james9437

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Reply 2 on: Jul 10, 2018
Wow, this really help

scottmt

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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