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Fi 515 Week6 Exam Essay

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Grading Summary
These are the automatically computed results of your exam. Grades for essay questions, and comments from your instructor, are in the "Details" section below.
Date Taken:
10/13/2013
Time Spent:
2 h , 49 min , 52 secs
Points Received:
52 / 100 (52%)

Question Type:
# Of Questions:
# Correct:
Multiple Choice
9
5
Essay
1
N/A

Grade Details - All Questions

1.
Question :
(TCO D) A stock just paid a dividend of D0 = $1.50. The required rate of return is rs = 10.1%, and the constant growth rate is g = 4.0%. What is the current stock price?

Student Answer:

$23.11

$23.70

$24.31

$24.93

$25.57 Instructor Explanation:
Chapter 7
D0 …show more content…

Student Answer:

12.60%

13.10%

13.63%

14.17%

14.74% Instructor Explanation:
Chapter 9
Bond yield 8.75%
Risk premium 3.85% rs = rd + Risk premium 12.60%

Points Received:
10 of 10 Comments:

7.
Question :
(TCO F) Cornell Enterprises is considering a project that has the following cash flow and WACC data. What is the project's NPV? Note that a project's expected NPV can be negative, in which case it will be rejected. WACC: 10.00%
Year 0 1 2 3 -----------------------------------------------
Cash flows -$1,050 $450 $460 $470

Student Answer:

$ 92.37

$ 96.99

$101.84

$106.93

$112.28 Instructor Explanation:
Chapter 10
WACC: 10.00%
Year 0 1 2 3
Cash flows -$1,050 $450 $460 $470 NPV = $92.37

Points Received:
10 of 10 Comments:

8.
Question :
(TCO F) Simkins Renovations Inc. is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's IRR can be less than the WACC (and even negative), in which case it will be rejected.

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