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  1)Kinston Nielson Motors has a share price of $25 today

Finance

 

1)Kinston Nielson Motors has a share price of $25 today. If Nielson Motors is expected to pay a dividend of $0.75 this year, and its stock price is expected to grow to $26.75 at the end of the year, then Nielson's dividend yield and equity cost of capital are:

  a.

3.0% and 7.0% respectively.

  b.

4.0% and 6.0% respectively.

  c.

3.0% and 10.0% respectively.

  d.

None of the answers are correct.

  e.

4.0% and 10.0% respectively.

2)A company is growing at a constant rate of 8 percent. Last week it paid a dividend of $3.00. If the required rate of return is 15 percent, what is the price of the share three years from now?

  a.

$42.83.

  b.

$46.29.

  c.

$58.31.

  d.

$51.02.

  e.

$48.30.

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