Homework Answers
The answer is True
Individual who purchase common stock has a right to recieve the dividends announced to them and they also recieve the money of the stock at the price it is trading in secondary market.
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Question 14 2 pts Individuals or investors purchasing a share of common stock expect to receive...
Toronto Skates Inc.’s common stock is selling at $22.22 per share. Investors expect to receive a...
Toronto Skates Inc.’s common stock is selling at $22.22 per share. Investors expect to receive a dividend of $1.80. The 90-day government T-bill yield is 4.3 percent. What is the dividend growth rate if the risk premium on comparable companies is 6.2 percent? A) 2.22% B) 2.40% C) 3.12% D) 3.54%
A share of stock with a beta of 0.77 now sells for $50. Investors expect the...
A share of stock with a beta of 0.77 now sells for $50. Investors expect the stock to pay a year-end dividend of $3. The T-bill rate is 4%, and the market risk premium is 8%. a. Suppose investors believe the stock will sell for $52 at year-end. Calculate the opportunity cost of capital. Is the stock a good or bad buy? What will investors do? b. At what price will the stock reach an “equilibrium” at which it is...
A share of stock with a beta of 0.76 now sells for $51. Investors expect the...
A share of stock with a beta of 0.76 now sells for $51. Investors expect the stock to pay a year-end dividend of $2. The T-bill rate is 3%, and the market risk premium is 7%. a. Suppose investors believe the stock will sell for $53 at year-end. Calculate the opportunity cost of capital. Is the stock a good or bad buy? What will investors do? (Do not round intermediate calculations. Round your opportunity cost of capital calculation as a...
You are considering the purchase of a share of Alfa Growth, Inc. common stock. You expect...
You are considering the purchase of a share of Alfa Growth, Inc. common stock. You expect to sell it at the end of one year for $76.33 per share. You will also receive a dividend of $4.64 per share at the end of the next year. If your required return on this stock is 8.99 percent, what is the most you would be willing to pay for Alfa Growth, Inc. common stock now? Round the answer to two decimal places.
A share of stock with a beta of 1.2 now sells for $100. Investors expect the...
A share of stock with a beta of 1.2 now sells for $100. Investors expect the stock to pay a year-end dividend of $1.50. The treasury bill rate is 5 percent and the expected rate of return on the market portfolio is 12 percent. If the stock is perceived to be fairly priced today, what must be investors’ expectation for the price of the stock at the end of the year? $109.50 $111.90 $116.50 $117.90 $106.90
QUESTION 41 All in Corporation's common shareholders expect to receive $1.95 per share dividend next year...
QUESTION 41 All in Corporation's common shareholders expect to receive $1.95 per share dividend next year based on the fact that they received $1.50 last year and they expect dividend to grow 10% next year. Furthermore, analysts predict that dividends will continue to grow at a rate of 10% into the foreseeable future. If All in were to issue common stock at $35.00 a share, the firm would incur a $4.50 per share cost to sell the new shares. What...
Polomi's common stock just paid a dividend of $1.19 per share. And the dividend is expected...
Polomi's common stock just paid a dividend of $1.19 per share. And the dividend is expected to grow at a rate of 4.80% every year. Investors require a rate of return of 10.40% on Polomi's stock. a. Calculate the intrinsic value of Polomi's stock? (Round your answer to 2 decimal places.) Intrinsic value = ? b. What should be the price of Polomi's stock 1 year from now if market expect its current market price reflects its intrinsic value? (Round...
1. Polomi's common stock just paid a dividend of $1.31 per share. And the dividend is...
1. Polomi's common stock just paid a dividend of $1.31 per share. And the dividend is expected to grow at a rate of 6.00% every year. Investors require a rate of return of 12.80% on Polomi's stock. a. Calculate the intrinsic value of Polomi's stock? (Round your answer to 2 decimal places.) Intrinsic value $ b. What should be the price of Polomi's stock 1 year from now if market expect its current market price reflects its intrinsic value? (Round...
Question 1 1 pts Bayside Corporation has an issue of preferred stock outstanding that has an...
Question 1 1 pts Bayside Corporation has an issue of preferred stock outstanding that has an 9.4% dividend rate on a par value of $75. The stock's market price is $50 and investors require a 12.5% rate of return on this stock. What is the intrinsic value of the preferred stock? $99.73 $37.60 $56.40 $75.00 $50.40 Question 2 1 pts Hamilton Company common stock is currently selling for $60 per share. The stock will pay a dividend of $4.35 next...
You plan to buy some common stock today. The first cash you expect to receive is...
You plan to buy some common stock today. The first cash you expect to receive is a dividend of $8.25 per share at the end of Year 2, when you also expect to sell the stock for $72.00 per share. If your required rate of return is 8.00 percent, how much should you be willing to pay per share for this stock today?
You are considering the purchase of a share of Alfa Growth, Inc. common stock. You expect to sell it at the end of one year for $76.33 per share. You will also receive a dividend of $4.64 per share at the end of the next year. If your required return on this stock is 8.99 percent, what is the most you would be willing to pay for Alfa Growth, Inc. common stock now? Round the answer to two decimal places.
QUESTION 41 All in Corporation's common shareholders expect to receive $1.95 per share dividend next year based on the fact that they received $1.50 last year and they expect dividend to grow 10% next year. Furthermore, analysts predict that dividends will continue to grow at a rate of 10% into the foreseeable future. If All in were to issue common stock at $35.00 a share, the firm would incur a $4.50 per share cost to sell the new shares. What...
Question 1 1 pts Bayside Corporation has an issue of preferred stock outstanding that has an 9.4% dividend rate on a par value of $75. The stock's market price is $50 and investors require a 12.5% rate of return on this stock. What is the intrinsic value of the preferred stock? $99.73 $37.60 $56.40 $75.00 $50.40 Question 2 1 pts Hamilton Company common stock is currently selling for $60 per share. The stock will pay a dividend of $4.35 next...
You plan to buy some common stock today. The first cash you expect to receive is a dividend of $8.25 per share at the end of Year 2, when you also expect to sell the stock for $72.00 per share. If your required rate of return is 8.00 percent, how much should you be willing to pay per share for this stock today?
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