common stock is selling for $50. The dividend paid next year will be $4.40 ass

common stock is selling for $50. The dividend paid next year will be $4.40 assuming a constant growth rate of 4.5%. What is
the capital gains yield?

8%

8.8%

3.4%

4.5%

You are analyzing a project and have gathered the following data:

Year

Cash Flow

0

-$175000

1

56400

2

61800

3

72000

4

75000

Required payback period

2.5 years

Required AAR

11.5%

Required return

14.5%

Based on the payback period of _____ years for this project you should _____ the project.

a.

2.79; accept

b.

3.79; accept

c.

2.79; reject