6. Springboro Tech is a young start-up company. No dividends will be paid on the stock over the next 15 years, because the firm needs to plow back its earnings to fuel growth. The company will pay a $15 per share dividend in 16 years and will increase the dividend by 4 percent per year thereafter. What is the current share price if the required return on this stock is 8 percent? (A) $118.22 (B) $119.19 (C) $120.00 (D) $164.59

7. Which one of the following statements is correct in relation to independent projects? (A) The internal rate of return cannot be used to determine the acceptability of a project that has financing type cash flows. (B) A project with investing type cash flows is acceptable if its internal rate of return exceeds the required return. (C) A project with financing type cash flows is acceptable if its internal rate of return exceeds the required return. (D) Projects with financing type cash flows are acceptable only when the internal rate of return is negative.

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