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Suppose Company X issues a common stock with current dividend as $1.62/per share. The expected growth rate for the dividends is said to be 2.5%. Let the current market price of the stock be $16.25/per share.
a) What is the discount rate for this stock if the market is fair and does not allow any arbitrage opportunity?
b) Suppose you own the stock now. Let's assume that you plan to hold the stock for 4 years only. What is your expected re-sell price for the stock?
c) There is another common stock issued by Company Y in the market. The current dividend for Company Y's stock is $3.20/per share. The current Company Y's stock price is $21.25/per share. Suppose this stock's discount rate is the same as that in question a) of problem 3. What is the growth rate of this stock's dividends?
An investment costs $1,000 and is expected to produce cash flows of $75 at the end of each of the next five years, and additional lump sum payment of $1,000.
assume that mary brown inc. hired you as a consultant to help itestimate the cost of capital. you have been provided
you have been asked by the president of your company to evaluate the proposed acquisition of a new spectrometer for
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Martin Software has a 9.2 percent coupon bonds on the market with 18 years to maturity. The bonds make semiannual payments and currently sell for 106.8 percent of par. What is the current yield on the bonds? the YTM? the effective annual yield?
Financial breakeven: How many choppers would you have to sell to break even, if you required a 15% return? (Hint: Use the 15% as the discount rate and calculate net present value. In Excel, you may want to use the Goal Seek command, or simply use ..
The Final Project will involve applying the concepts learned in class to an analysis of a company using data from its annual report. Using the concepts from this course, you will analyze the strengths and weaknesses of the company and write a ..
Suposse you decide to sell your bonds today. When the required return on the bonds is 7 percent. If the inflation rate was 4.2 percent over the past year, what was your total real return on investment?
Which of the final 12 discussion area would be most difficult for you as a manager to discuss in the organization with your colleagues? Why?
Do you think the balance-sheet channel of monetary policy would be stronger or weaker if: - Firms' balance sheets in general are very healthy?
The Extreme Reaches Corporation last paid a $1.50 per share annual dividend. The corporation is considering on paying $3.00, $5.00, $7.50, and $10.00 a share over the next four years, respectively.
select two of the many capital structure concepts such as modigliani and miller pecking order theory leverage and so on
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