ADP, Inc. has decided to repurchase 600 shares of the 4,500 outstanding.

What will the price per share be after the repurchase is completed?

The capital structure weights used to compute a firm’s WACC will be affected by an increase in the firm’s beta. True False

How many days on average does it take a firm to sell an inventory item if the average inventory is $42,800, the cost of goods sold is 78% of sales, and the yearly sales are $311,400? The profit margin is 6% and the tax rate is 35%.

Al Oft, CEO of Balloons, Inc, predicts that the company will pay a steady dividend of $.75 per share in each of the next two years. After this, he expects the dividend to increase at a rate of 20% for years 3, 4, and 5. After year 5, the dividend will grow at a perpetual rate of 4%.

What is the market value of a share of stock in the company if the required rate of return is 10%?

Ajax common stock is expected to return 17 percent in a boom economy, 11 percent in normal economy, and 2 percent in a recession. The probability of a boom is 25 percent, of a normal economy is 70 percent, and of a recession is 5 percent.

What is the expected return of this stock?12.05 percent12.93 percent13.32 percent13.68 percentAnswer is A. How did this come to be? Please explain thanks


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