Reference no: EM132776866

Problem 1: Investors expect ABC Corporation to begin paying dividends. The company should grow at a constant rate of 10 percent per year up to infinity. If the required rate of return is 15 percent and the current dividend paid is $2.0. what is the value of the stock at year six?

Select one:

a. $40
b. $77.8
c. $70.8
d. $44

Problem 2: You have $10,000 to invest. Assuming annual compounding, how long will it take for the $10,000 to double if it is invested at an annual interest rate of 14 percent?

Select one:

a. 5.29 years
b. 3.29 years
c. 2.50 years
d. 4.21 years