1. Synder Computer Chips Inc. is experiencing a period of rapid growth. Earnings per share are expected to grow at a rate of 25% during the next three years, 15% in the fourth year and 10 percent thereafter. The company plans to initiate dividends payment for the first time in the fifth year (No dividend payout in the first 4 years). The dividend payout ratio will be kept constant at 60%. The earnings per share is $1 this year. The required rate of return on the stock is 13%.
What is the earnings per share in the fifth year?
a. 3.07
b. 2.07
c. 1.47
d. 2.47
e. 2.97
2. Which index is an important constant quality house price index for the U.S?
a. S&P 500
b. S&P MidCap 400
c. S&P Case-Shiller
d. S&P SmallCap 600
e. S&P total Market
3. Working capital management:
a. balances the amount of company debt to the amount of available equity.
b. is concerned with the upper portion of the balance sheet.
c. ensures that dividends are paid to all stockholders on an annual basis.
d. ensures that sufficient equipment is available to produce the amount of product desired on a daily basis.
e. ensures that long-term debt is acquired at the lowest possible cost.