1. What is the opportunity cost of going to graduate school? Explain in detail, both in terms of forgone income and forgone leisure.
2. A stock’s price is $30/share. Investors expect that one year from today, the stock will pay a dividend of $1/share. The required rate of return on the stock is 20%. Implicit in its stock price of $30 is an expected perpetual dividend growth rate. Compute that expected dividend growth rate, if it is expected to grow at that rate forever after.
3. Explain in detail the steps involved in the IPO process.
In general, what attributes make a company a good candidate for an IPO?