Each of the potential investments

Assignment Help Financial Management

Reference no: EM131957284

1. Please show all work with formula used.

Ex: Value of a stock with $1.40 annual dividend and 18% required return.

Ex: Value of a stock with $1.40 annual dividend growing at 2.5% per year and 18% required return.

Ex: Total return on a stock with 4% dividend yield and 8% expected growth rate (i.e. capital gain rate).

Ex: Expected capital gain rate for a stock with current price of $12, required return of 10%, and next expected dividend of $0.30.

2. Jose has $4,000 to invest for a 4-year period. He is looking at four different investment choices. What will be the value of his investment at the end of 4 years for each of the following potential investments?

a. Bank CD at 4.5%.

b. Bond fund at 8.5%.

c. Mutual stock fund at 15%.

d. New venture stock at 24%.

Reference no: EM131957284

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