Stock A pays a dividend of $3 per share every year. The discount rate is 10% and the return on equity is 25%. 1) If you want to buy stock A at year 1 and hold it for 5 years, what is the price you have to pay at year 1?
A) $30.
B) $33.
C) $36.
D) $42.
E) None of the above.
2) What is the payout ratio for this stock?
A) 1.
B) 1.5.
C) 0.4.
D) 0.
E) None of the above.
3) What is the earning per share at year 2?
A) $5.
B) $4.
C) $3.
D) Not enough info.
E) None of the above.
4) If you want to buy stock A at year 1 and hold it for 5 years, what is the price you have to pay at year 1 (p1)?
a) $30.
b) $33.
c) $36.
d) $40.
e) none of the above.

Stocks a, b, and c are similar in some respects: each has an expected return of 10% and a standard deviation of 25%. stocks a and b have returns that are independent of one another; i. e., their correlation coefficient, r, equals zero. stocks a and c have returns that are negatively correlated with one another; i. e., r is less than 0. portfolio ab is a portfolio with half of its money invested in stock a and half in stock b. portfolio ac is a portfolio with half of its money invested in stock a and half invested in stock c. which of the following statements is correct? a. portfolio ab has a standard deviation that is greater than 25%.b. portfolio ac has an expected return that is less than 10%.c. portfolio ac has a standard deviation that is less than 25%.d. portfolio ab has a standard deviation that is equal to 25%.e. portfolio ac has an expected return that is greater than 25%.

Consider two similar industries, portal crane manufacturing (pcm) and forklift manufacturing (flm). the pcm industry has exactly three incumbents with annual sales of $800 million, $200 million and $100 million, respectively. the flm industry has also exactly three incumbents, with annual sales of $500 million, $450 million and $400 million, respectively. which industry is more likely to experience a higher level of rivalry?

Banana computers has decided to procure processing chips required for its laptops from external suppliers instead of manufacturing them in their own facilities. how will this decision affect the firm? a. the firm will be protected against the principal-agent problem. b. the firm's administrative costs will be low because of necessary bureaucracy. c. the firm will have more flexibility in purchasing and comparing prices of goods and services. d. the firm will have high-powered incentives, such as hourly wages and salaries.