<1> BA plc is expected to pay a dividend of 3 per share at the end of the year (D1) and the dividends are expected to grow at a constant rate of 5% forever. If the current price of the stock is 30 per share calculate the expected return or the cost of equity capital for the firm. a. 14% b. 6% c. 10% d. 15% <2> A share in Strath Plc can be valued using the constant growth in dividends model. The share is currently trading at a price of 2.50. Dividends and earnings grow at a constant rate of 8 per cent each year and the firm is expected to pay a dividend of 0.25 next year. What is the expected rate of return on the share? a. 10.00 per cent b. 9.52 per cent c. None of these answers d. 18.00 per cent e. 12.45 per cent <3> As at 30 September 2022, Juno plc reported current assets of 1.1 million, including inventory of 450,000, and current liabilities of 750,000 in its balance sheet. For the period ending 30 September 2022, revenue was 10 million and gross profit was 2.5 million. What is the inventory holding period in days (to the nearest day)? a. 54 b. 16 c. 40 d. 66 e. 22.

1. <1> BA plc is expected to pay a dividend of 3 per share at the end of the year (D1) and the
dividends are expected to grow at a constant rate of 5% forever. If the current price of the stock
is 30 per share calculate the expected return or the cost of equity capital for the firm.
a. 14%
b. 6%
c. 10%
d. 15%
<2> A share in Strath Plc can be valued using the constant growth in dividends model. The share
is currently trading at a price of 2.50. Dividends and earnings grow at a constant rate of 8 per
cent each year and the firm is expected to pay a dividend of 0.25 next year. What is the expected
rate of return on the share?
a.
10.00 per cent
b.
9.52 per cent
c.
None of these answers
d.
18.00 per cent
e.
12.45 per cent
<3>
As at 30 September 2022, Juno plc reported current assets of 1.1 million, including inventory of
450,000, and current liabilities of 750,000 in its balance sheet. For the period ending 30
September 2022, revenue was 10 million and gross profit was 2.5 million. What is the inventory
holding period in days (to the nearest day)?
a. 54
b. 16
c. 40
d. 66
e. 22