1. As an investor you expect Dixie Ltd to pay a dividend of $0.95 in one year’s time, another dividend of $1.05 in two years’ time, immediately after which you will sell the share for $9.95. If the cost of capital is 11% p.a., what is the current price of the share? A. $8.08 B. $9.78 C. $9.95 D. $11.95 2. If the earnings per share figure of the All Ordinaries Index is 380 and the price-earnings ratio is 19, what is the price of the All Ordinaries Index? A. 20 B. 380 C. 399 D. 7220 3. If the return on equity is 7%, the return on assets is 5% and the firm has a dividend payout ratio of 60%, what are the internal growth rate (IGR) and the sustainable growth rate (SGR) respectively? A. 3.00% and 3.09% B. 3.09% and 3.00% C. 2.04% and 2.80% D. 4.20% and 2.88% 4. Suppose S&P 200 is at 6900. Assume the continuous dividend yield is 4.0% p.a. and the risk-free rate of returns is 5.0% p.a. If a SPI futures contract has 48 days left to expiry, what should its price be? A. 6891 B. 6900 C. 6909 D. 6946 5. Situations where the current futures price lies below the expected futures price are called: A. Contango B. Normal contango C. Backwardation D. Normal backwardation