A stock will pay a dividend of $4 at the end of the year. It sells today for $100 and is expected to sell in one year for $105. What is the implied rate of return on this stock? Enter in percent and round to two decimal places.
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You buy a share of The Ludwig Corporation stock for $19.40. You expect it to pay dividends of $1.07, $1.16, and $1.2576 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $28.27 at the end of 3 years. Calculate the growth rat..
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You have a two children, A and B. Child A is not going to college but is working in a business to learn the ropes. Child A plans on opening a business someday. Child B is attending college. You put a certain amount of money into an account.
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LKM, Inc, wants to issue new 20 year bonds for some much needed expansion projects. The company currently has bonds on the market that sell for $972.78, making semi-annual payments, with a 6.5% coupon rate. What is the yield to maturity of the bond?
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A growth company expects its dividends to growth at 10% each year for the next three years, and then maintain a sustainable growth rate of 4% thereafter. The last dividend was $2.00, and the required return is 16%. What is the value of the stock pric..
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Your Christmas ski vacation was great, but it unfortunately ran a bit over budget. All is not lost: You just received an offer in the mail to transfer your $13,200 balance from your current credit card, which charges an annual rate of 21 percent, to ..
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A firm evaluates all of its projects by using the NPV decision rule. Year Cash Flow 0 –$25,000 1 21,000 2 17,000 3 6,000 Required: (a) At a required return of 13 percent, what is the NPV for this project? (b) At a required return of 41 percent, what ..
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FastTrack Bikes, Inc. is thinking of developing a new composite road bike. Development will take six years and the costs is $296,638 per year. Once in production, the bike is expected to make $202,100 per year for 10 years. The cash inflows begin at ..
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Your portfolio allocates equal funds to the DW Co. and Woodpecker, Inc. DW Co. stock has an annual return mean and standard deviation of 11 percent and 40 percent, respectively. What is the smallest expected loss for your portfolio in the coming mont..
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Determine the missing amounts assuming that this company uses the periodic inventory system. 2014 2015 2016 Sales $290,000 $ ? $410,000 Sales returns & allowances 11,000 13,000 ? Net sales ? 347,000 ? Beginning inventory 20,000 32,000 ? Ending invent..
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Quantum Inc., a U.S.-based corporation, borrows SF 2,000,000 from the Swiss bank, UBS. The entire principal is to be repaid at the end of the year, and the interest rate is 4% per annum to be paid at the end of the year in Swiss francs. Suppose that ..
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Blue water designs is preparing a bond offering with a 7% coupon rate and a face value of $1000. The bonds will be repaid in 5 years. The company plans to issue the bonds at par value me pay interest semi annually. Given a discount rate of 6%, what s..
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