* 1. Which of the following does not always increase a company market value * a. Increase the expected growth weight of sales * b. Increasing the expected operating profitability (NOPAT/SALES) * c. Decreasing the capital requirements (Capital /sales0 * d. Decreasing the weighted average cost of capital * e. Increasing the expected rate of return on invested capital * 2. Which of the following statement is correct * a. The MIRR and MPV decision could never conflict * b. The IRR method can never be subject to the multiple IRR problems, while the MIRR method can be * c. One reason people prefer the MIRR to the regular IRR is that the MIRR is based on a generally more reasonable re-investment rate assumption. * d. The higher the WACC , the shorter the discounted payback period. * e. The MIRR method assumes that cash flow are reinvested at the cross over rate •3. The Ackert company's last dividend was a $1.55 , the dividend growth rate is expected to be constant at 1.5% for two years, after which dividends are expected to grow a rate of 8.0% for ever. The firm required return the (rs) is 12.0% what is the best estimate of the current stock price.
a.$37.05
b. 38.16
c.39.30
c. 40.48
d.41.7

Last dividend (D0) $1.55 Short-run growth rate 1.50% Long-run growth rate 8.00% Required return 12.00% Year 0 1 2 3 1.50% 1.50% 8.00% Dividend $1.5500 $1.5733 $1.5968 $1.7246 Terminal value = D3/(rs − g3) = 43.1149 Total CFs $1.5733 $44.7118 PV of CFs $1.4047 $35.6439 Price = Sum of PVs = $37.05

4. The Chadmark corporation budgeted monthly sales are $3,000. In the first month, 40% of his customers paid and take the 2% discount the remaining 60% in the month following the sale and