44. Kay’s Sewing Loft is going to reduce its annual dividend by 10 percent a year for the next two years. After that, it will maintain a constant dividend of S2 a share. Last year, the company paid an annual dividend of $3 per share. What is the market value of this stock if the required return is 13.7 percent?
A) $14.63 B) $15.55 C) $15.08 D) $14.19 E) $15.84
45. An investment costs $152,000 and has projected cash inflows of $71.800.986.900.and -$11.200 for Years 1 to 3, respectively. If the required rate of return is 15.5 percent, should o accept the investment based solely on the internal rate of return rule? Why or why not?
A) Yes: The IRR exceeds the required return
B) Yes: The IRR is less than the required return
C) No: The IRR is less than the required retum.
D) No; The IRR exceeds the required return.
E) You should not apply the IRR rule in this case.
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