Find the three-year forward price for the stock

Assignment Help Financial Management
Reference no: EM131058010

A stock is currently selling for $50 a share. The stock is not expected to pay any dividends over the next 3 years. The annual risk-free rate with continuous compounding is 5%. Find the three-year forward price for the stock.

A. 52.50 B. 52.56 C. 57.88 D. 58.09 E. 59.92

Reference no: EM131058010

Questions Cloud

Explain strategies for improving human resource : 1. Explain strategies for improving human resource productivity within a firm (700-850 words)
Before-tax operating costs and mainly labor : You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $230,000. The truck falls into the MACRS 5-year class, and it will be sold after 5 years for $23,000. The truck will have no ..
In what ways have the electoral college impact the way : In what ways have the Electoral College impact the way in which presidential candidates run their campaigns? Be sure to cite readings whenever possible.
Given the three goals of relational database design : Given the three goals of relational database design
Find the three-year forward price for the stock : A stock is currently selling for $50 a share. The stock is not expected to pay any dividends over the next 3 years. The annual risk-free rate with continuous compounding is 5%. Find the three-year forward price for the stock.
Why do you think the us should bases their foreign policy : Why do you think the u.s should or should not bases their foreign policy on ultimately power? What is your position on the other elements on the 4 p's peace, prosperity or principles.
Implementing customer needs into functional design : Quality Function Deployment (QFD) is a means for implementing customer needs into functional design. The mission of ABC Audio LLC is to deliver highperforming, rugged and reliable quality audio products to its customers. Design and explain step by..
What is investment strategy : Stock Y has a beta of 1.05 and an expected return of 12%. Stock Z has a beta of 0.68 and an expected return of 10.26%. If the risk-free rate is 5% and market risk premium is 7%, are these stocks correctly priced in the market? If not, then which one ..
Outline what sort of redundancy will result if we do so : Outline what sort of redundancy will result if we do so.

Reviews

Write a Review

Financial Management Questions & Answers

  Credit default swaps contributed to the crisis

Credit default swaps contributed to the crisis in all the following reasons except:

  Outstanding student loan with required payments

You have an outstanding student loan with required payments of $550 per month for the next four years. If you are required to continue making payments of $550 per month until the loan is paid off, what is the amount of your final payment? What effect..

  Determine the required rate of return

Try to determine the required rate of return of Dark Woods Corporation common stock. The firms beta is 1.5. The rate on a ten year treasury bond is 2.68 percent and market return is 6.71%. The prices for the Red Star Corporation for the first quarter..

  What royalty per pack would permit the store to earn

Southeast U's campus book store sells course packs for $15.00 each, the variable cost per pack is $12.00, fixed costs for this operation are $300,000, and annual sales are 95,000 packs. The unit variable cost consists of a $3.00 royalty payment, VR ,..

  Data recovery services specializes in data recovery

Data Recovery Services (DRS) specializes in data recovery from crashed hard drives. The price charged varies based on the extent of damage and the amount of data being recovered. DRS offer a 10% discount to students and faculty at educational institu..

  About the portfolios-what must be the risk-free rate

Assume both portfolios A and B are well diversified, that E(rA) = 14.8% and E(rB) = 15.8%. If the economy has only one factor, and βA = 1 while βB = 1.1, What must be the risk-free rate?

  What tax rate would investor be indifferent between bonds

Corporate bonds issued by Johnson Corporation currently yield 8.5%. Municipal bonds of equal risk currently yield 6.5%. At what tax rate would an investor be indifferent between these two bonds?

  How much of the companys profits have been reinvested

Consider the following balance sheet data for Lexi’s Computer Stores: Cash $ 52,000 Accounts payable $ 64,500 Receivables 204,500 Short-term bank note 122,000 Inventories 175,500 Accrued wages and taxes 52,500. How much of the company's profits have ..

  The glass-steagall act prohibited

The Glass-Steagall Act prohibited

  Calculate the beta and standard deviation of stock

Consider the following information on Stocks I and II: State of Economy Probability of State of Economy Rate of Return if State Occurs Stock I Stock II Recession .24 .030 ?.34 Normal .59 .340 .26 Irrational exuberance .17 .200 .44 The market risk pre..

  About the annual pretax cost savings

Warmack Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $390,000 is estimated to result in $150,000 in annual pretax cost savings.

  Determining monetary advantage of one investment opportunity

There are several accepted methods of determining the monetary advantage of one investment opportunity over another: The payback method; zero discount rate; net present value; internal rate of return; modified internal rate of return; etc. Discuss on..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd