Question No 1:
Sumi Inc. has policy of paying a Rs. 9 per share dividend every year. If this policy is to continue indefinitely, what will be the value of a share of stock at a 12% required rate of return?
Rs. 30
Rs. 45
Rs. 60
Rs. 75

Question No: 2
The XYZ Corporation is considering an investment that will cost Rs. 80,000 and have a useful life of 4 years. During the first 2 years, the net incremental after-tax cash flows are Rs. 25,000 per year and for the last two years they are Rs. 20,000 per year. What is the payback period for this investment ?
3.2 Years
3.5 Years
4.0 Years
Cannot be determined from the given information

Question No: 3
Which of the following statement is INCORRECT regarding a normal project ?
a)If the IRR of a project is greater than the discount rate, k, then its PI will be greater than 1
b)If the NPV of a project is greater than 0, then its PI will exceed 1
c)If the IRR of a project is 8%, its NPV, using a discount rate, k, greater than 8%, will be less than 0
d)If the PI of a project equals 0, then the project's initial cash outflow equals the PV of its cash flows

1. 👍 0
2. 👎 0
3. 👁 81
1. Q1. 75
9/0.12=75

Q2 3.5

Q3, If the PI of a project equals 0, then the project's initial cash outflow equals the PV of its cash flows.

1. 👍 0
2. 👎 0

## Similar Questions

1. ### Finance

Hetfield and Ulrich, Inc., has an odd dividend policy. The company has just paid a dividend of \$7 per share and has announced that it will increase the dividend by \$5 per share for each of the next 4 years, and then never pay

asked by T on April 29, 2012

Hot Wings, Inc., has an odd dividend policy. The company has just paid a dividend of \$11.25 per share and has announced that it will increase the dividend by \$9.25 per share for each of the next four years, and then never pay

asked by james on June 25, 2012
3. ### non-constant dividends

I have no idea where to begin with this one ! Nonconstant Dividends Hetfield and Ulrich, Inc., has an odd dividend policy. The company has just paid a dividend of \$12 per share and has announced that it will increase the dividend

asked by Kurt on June 28, 2009
4. ### Finance

Bread, Inc., has an odd dividend policy. The company has just paid a dividend of \$6 per share and has announced that it will increase the dividend by \$4 per share for each of the next five years, and then never pay another

asked by Erika on July 30, 2010
5. ### Finance

Suppose you know that a company’s stock currently sells for \$54 per share and the required return on the stock is 9 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a

asked by Jenna Fray on October 2, 2012
6. ### Finance

To finanance a purchase a company will sell 10 year bonds paying 6.6% per year at the market price of \$1062. Preferred stock paying a \$2.05 dividend can be sold for 25.93. Common stock is cirrently seeling for 54.29 per share and

asked by Susie on November 22, 2012
7. ### finance

3.The Lo Company earned \$2.60 per share and paid a dividend of \$1.30 per share in the year that just ended. Earning and dividend per share are expected to grow at a rate of 5% per year in the future. Determine the value of the

8. ### Finance

I've posted this question once already and really need help. You buy 100 shares of XYZ at \$40 per share.XZ pays an annual dividend of \$2.00 and offers an automatic dividend reinvestment plan.Assume that the dividend will remain

asked by Sara on February 15, 2013
9. ### finance

a company paid dividend of \$7 per share and has announced that it will increase the dividend by \$4 per share each of the next 4 years and then never pay another dividend again. the required rate of return is 11 percent on the

asked by Daniel on October 17, 2012
10. ### financial management

The HighT Company is a manufacturer of electronic products. The company is preparing a financial plan for the coming year and has the following independent projects under consideration: Project Initial investment (\$ millions)

asked by john on June 16, 2011

More Similar Questions