1. IBM paid dividends of $4.80 and earned $8.40 per share in the most recently completed full year. Next year earnings and dividends are expected to grow at 8% which is also the long-term expected growth rate. If the required return on IBM stock is 12% the market price per share should be closest to:
a) $50
b) $80
c) $100
d) $120
e) $130
2. A restriction with hedge funds under which investors cannot withdraw their funds for as long as several months or years is called ________.
A) Transparency
B) A lock-up period
C) A back-end load
D) Convert arbitrage
E) Limited liability
3. Hedge fund managers are compensated by ____________.
a) Management fees from fund assets and incentive bonuses
b) Commissions and a share of the gains
c) Commissions and management fees
d) Management fees and a share of the gains
e) Commissions, fees, bonuses, and a share of the gains