NEU Business School Quiz #2 Instructor: Tang Vu Hung

E-BBA Program

Name: _________________________________________________________________

1. Suppose you expect H Cor. to pay annual dividend of 1,200 VND per share in the coming year
and to trade for 90,000VND per share at the end of the year. The investment with equivalent risk to
H’ stock has an expected return of 20%.

(a) What is the most you would pay today for H’ stock? Please show your work [2 points]

(b) What dividend yield and capital gain would you expect at this price? Please show your work [2
points]

2. A share of CCC Inc. stock is currently selling for 82,000 VND. The share is expected to pay a
dividend of 2,500VND at the end of the year. Dividends are forecasted to grow at a constant rate
of 4% indefinitely. Calculate the expected return on CCC stock. Please show your work [3
points]

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NEU Business School Quiz #2 Instructor: Tang Vu Hung
E-BBA Program

3. A project will produce cash inflows of $3,200 a year for 4 years with a final cash inflow of $5,700
in year 5. The project's initial cost is $9,500. What is the net present value and the payback period
of this project if the required rate of return is 16 percent? [3 points]