1. A financial analyst expects KacieCo. to pay a dividend of $2 per share one year from today, a dividend of $3 per share in years two, and estimates the value of the stock at the end of year two to be $22. If your required return on KacieCo stock is 14 %, what is the most you would be willing to pay for the stock today if you plan to sell the stock in two years?
A) $20.77 B) $20.99 C) $23.68 D) $26.90 E) $27.00
2. If your firm expects the Canadian dollar to substantially depreciate, it could speculate by ____ Canadian dollar call options or ____ Canadian dollar futures in the futures exchange market. (Points : 3.5)
A. selling; selling
B. selling; purchasing
C. purchasing; purchasing
D. purchasing; selling