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Q1) If the nominal return on U

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Q1) If the nominal return on U.S. Treasury bills is 14 percent while the rate of expected inflation is anticipated to be 5 percent, then what should real rate of return be?

1. 10.5%
2. 8.5%
3. 9.8%
4. 11%

Q2) Your firm paid a dividend $4.2 this year. The dividend is expected to grow at a constant rate of 8 percent. If the required rate of return is 16%, What is the value of your firm’s stock?

1. $43.5
2. $56.7
3. $52.5
4. $45

Q3) You own 5,000 shares Split. The shares are currently selling for $75. If the company has just announced a 4-for-1 stock split, How many shares will you own after the split?

a.   10,000

b.   20,000

c.   15,000

d.   5,000