1. What is the price of a share that recently paid a dividend of $5.39, assuming that the dividend is expected to remain unchanged in the future and that the appropriate cost of equity is 11.77% p.a.?
2. Consider a 7 year bond with a face value of $1,000 and with an annual coupon payment of $100. What is the market value of this bond if the appropriate required rate of return is 4.42% p.a.?
3. Given the following information about Flinstone Ltd., what is the required rate of return of its ordinary shareholders? The expected growth rate of dividends is 4.42 percent p.a., the current market price of its ordinary shares is $53.9 and the last dividend paid to the firm's ordinary shareholders was $5.39.
Express your answer in four decimal places (e.g. 0.0213 instead of 2.13%)
4. Project Rocket-STAR costs $10,000 to invest in and provides for net cash-flows of $4,000 in year 1, $5,000 in year 2, $2,000 in year 3 and $3,000 in year 4. What is the payback period for Project Rocket-STAR?
Express your answer in two decimal places
5. Given the following information:
EPS = $5.39
re = 11.77% p.a.
b = 0.60
g = 4.42% p.a.
what will be the share price?
Express your answer in two decimal places