1. As the hurdle rate (i.e., the opportunity cost of capital) is increased, the NPV of a specific project will:
A. stay the same
B. increase
C. decrease
D. decrease to zero, then remain constant
E. increase to zero, then remain constant
2. ABC stock is expected to pay a $4/sh dividend 1 year from today. If dividends are expected to grow at 5%, and investor's required expected rate of return for this stock is 15%, what is the estimated value of the stock based on the discounted dividend model?
$20
$30
$40
$60