1. A firm's present market value is $7,551,766. Their most recent annual cash flow is $620,000. Using a discount rate of 8.90%, what growth rate (of cash flow) is the market using to determine the firm's present market value? [hint: use perpetuity formula]
A) 8.21%
B) 0%
C) 2.25%
D) .69%
2. Which of the following is a measure of how much the company returns to its investors, both shareholders and creditors?
A. Return on Assets
B. Return on Equity
C. Dividends
D. Earnings per Share