1. Calculate the stock value in the following scenario: The next dividend payment by RST Incorporated will be $3.45 per share. The dividends are projected to sustain a 6.50 percent growth rate into the future. If RST stock currently sells for $67 per share, what is the required return?
2. What annual rate of return must you earn if you want your initial lump-sum investment to triple, if the investment is allowed to grow for 7 years? Assume annual compounding. Choose the closest answer.
3. A company with an average WACC of 10% adjusts for risk by adding 2% for high risk projects and subjecting 2% for low risk projects. Which of the following projects should the company accept? Question 12 options: An average risk project with an IRR of 10% Low risk project with an IRR of 7% High risk project with an IRR of 13% High risk project with IRR of 11%.