What is the rate of inflation

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1. The nominal rate of return on the bonds of Springs Co. is 7.82%. The real rate of return is 2.94%. What is the rate of inflation?

2. Ginger Foods just paid its annual dividend of $2.4 a share. The firm recently announced that all future dividends will be increased by 3 percent annually. What is one share of this stock worth to you if you require a 10 percent rate of return?

3. Stock A just paid a $3.8 a year dividend which is expected to increase by 4.5% per year. If you are planning on buying this stock three years from today, how much should you expect to pay per share if the market rate of return for this type of security is 7.7% at the time of your purchase?

4. Salad Bowl, Inc. recently paid a $6.6 annual dividend on its common stock. This dividend increases at an average rate of 3% per year. The stock is currently selling for $80 a share. What is the market rate of return?

Reference no: EM131562419

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