Since 1925 which of the following group of assets had the


1. Biopharma made two announcements concerning its common stock today. First, the company announced that its next annual dividend has been set at $1.20 a share. Secondly, the company announced that all future dividends will increase by 7% annually. What is the maximum amount you should pay to purchase a share of Sam's stock if your goal is to earn a 15% rate of return?

$15.00

$12.00

$35.10

$22.50

$18.00

2. Since 1925, which of the following group of assets had the highest risk premium?

a. Large-company common stocks

b. Small-company common stocks

c. U.S. Treasury Bills

d. Long-term corporate bonds

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Financial Management: Since 1925 which of the following group of assets had the
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