Homework Answers
rate positively ..
| Ans 18 - A | ||||||||
| Price of stock = expected dividend next year/(required rate - growth rate) | ||||||||
| Price = | 4/(10%-6%) | |||||||
| 100 | ||||||||
| Ans 18 - B | ||||||||
| Price = | 4/(10%-5%) | |||||||
| 80 | ||||||||
| Ans 19 | Price = | 5/12% | ||||||
| 41.67 | ||||||||
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18. You want to earn a return of 10% on cach of two stocks, A and...
Fin Corp currently pays out 100% of its earnings to shareholders as dividends. It expects to...
Fin Corp currently pays out 100% of its earnings to shareholders as dividends. It expects to yield $4 earnings per share forever starting next year (exactly one year from now). The market risk premium is 8%, and the risk-free rate is 4%. Fin Corp’s stock beta β is 1. (a) What is the required rate of return for Fin Corp stocks? (b) Calculate its stock’s current intrinsic value if the firm keeps its current payout policy forever. (c) If Fin...
2. (8 points) Sure Tool Company is expected to pay a dividend of $2 in the...
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6. If all three versions of the efficient market hypothesis (EMH) are t atement below a....
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Questions 1-3 Create an excel file and solve the following problems. 1. Firm ABC has a...
Questions 1-3
Create an excel file and solve the following problems. 1. Firm ABC has a current market value of $41 per share with earnings of $3.64. What is the present value of its growth opportunities if the required return is 992 Use excel spinners to change required return to 8%, 10%, 11%, and 12%. Record and report present values for each. 2. Firm X pays a current (annual) dividend of $1 and is expected to grow at 20% for...
If the expectation of short-term interest rate remains the same in the future, the expectations theory...
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questions 13-16 please the required 13. An underpriced stock provides an expected return that is return...
questions 13-16 please
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Questions 1-3
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