The amount by which the required discount rate exceeds the


1. A common stock just paid a dividend of $5. The dividend is expected to grow at 15% for 4 years, then it will grow at 8% in perpetuity. If the discount rate is 18%, what is the stock worth?

2. What is the risk to the firm of being unable to cover financial obligations a. total risk b. business risk c. financial risk d. diversifiable risk.

3. The amount by which the required discount rate exceeds the risk free rate is called a opportunity cost risk premium risk equivalent excess risk.

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Financial Management: The amount by which the required discount rate exceeds the
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