Q7: formosan freedom co. is currently priced at $42.50 per share and it is expected to sell for 6% more next
year. the stock will pay an annual dividend per share of $1.10 next year. what is the expected return on this
stock?

q8: suppose mbi co. is expected to pay a $0.60 dividend per share next year. wall street analysts project the
stock will sell for $35.75 in one year. you have been earning 11.5% on your other investments and you believe
this one should give you the same return. what is the most you can pay for mbi today in order for you to earn
your required return?

Beta coefficients and the capital asset pricing model personal finance problem katherine wilson is wondering how much risk she must undertake to generate an acceptable return on her porfolio. the risk-free return currently is 4%. the return on the overall stock market is 14%. use the capm to calculate how high the beta coefficient of katherine's portfolio would have to be to achieve a portfolio return of 16%.

Assume today is december 31, 2013. barrington industries expects that its 2014 after-tax operating income [ebit(1 – t)] will be $400 million and its 2014 depreciation expense will be $70 million. barrington's 2014 gross capital expenditures are expected to be $120 million and the change in its net operating working capital for 2014 will be $25 million. the firm's free cash flow is expected to grow at a constant rate of 4.5% annually. assume that its free cash flow occurs at the end of each year. the firm's weighted average cost of capital is 8.6%; the market value of the company's debt is $2.15 billion; and the company has 180 million shares of common stock outstanding. the firm has no preferred stock on its balance sheet and has no plans to use it for future capital budgeting projects. using the corporate valuation model, what should be the company's stock price today (december 31, 2013)? round your answer to the nearest cent. do not round intermediate calculations.

When partners own different portions of the business, the terms should be stated clearly in what document? the articles of incorporation the executive summary the business summary the partnership agreement