Determine the expected percentage holding period return

Assignment Help Financial Management

Reference no: EM131446836

National Telephone and Telegraph (NTT) Company common stock currently sells for $60 per share. NTT is expected to pay a $4 dividend during the coming year, and the price of the stock is expected to increase to $65 a year from now.

a. Determine the expected (ex ante) percentage holding period return on NTT common stock.

b. Suppose that 1 year later, NTT’s common stock is selling for $75 per share. During the 1-year period, NTT paid a $4 common stock dividend. Determine the realized (ex post) percentage holding period return on NTT common stock.

c. Repeat Part b given that NTT’s common stock is selling for $58 1 year later.

d. Repeat Part b given that NTT’s common stock is selling for $50 1 year later.

Reference no: EM131446836

Questions Cloud

Calculate the payback and net present value for project : A mfg company is thinking of launching a new product. The company expects to sell $950,000 of the new product in the first year and $1,500 each year thereafter. direct costs including labor and materials will be 45% of sales. Calculate the payback (P..

What is the minimum variance hedge ratio : A trader owns 55,000 troy oz of silver and decides to hedge with 6-month silver futures contracts. Each futures contract is on 5,000 troy oz. The spot price is $18.72 and the futures price $17.63 per troy oz. What is the minimum variance hedge ratio?..

Cash conversion cycle metal supplies : Cash conversion cycle Metal Supplies is concerned about its cash management. On average, the day's sales in inventory (duration of inventory on shelf) is 90 day. Accounts receivable are collected in 90 days, while accounts payable are paid in days. W..

The internal audit function : You are the director of internal audit at a large publicly traded manufacturing company. You recently met with the manager of IT and expressed the desire to establish a more effective relationship between the two departments. The request that the int..

Determine the expected percentage holding period return : National Telephone and Telegraph (NTT) Company common stock currently sells for $60 per share. NTT is expected to pay a $4 dividend during the coming year, and the price of the stock is expected to increase to $65 a year from now. Determine the expec..

How much money do you receive from the buyer : You would like to sell 500 shares of Pfizer, Inc.(PFE). The current bid and ask quotes are $27.26 and $27.29, respectively. You place a limit sell-order at $27.28. If the trade executes, how much money do you receive from the buyer?

Ethics codes apply to project selection-capital budgeting : How do ethics codes apply to project selection and capital budgeting? What are the potential risks to a company of unethical behaviors by employees? What are potential risks to the public and to stakeholders?

Supply the majority of the firm capital : The optimal dividend policy is the one that satisfies the bondholders because they supply the majority of the firm’s capital. The use of debt financing affect the probability of bankruptcy, but it has no effect on the firm’s earnings or stock price. ..

What is the expected profit for listing : A real estate agent is trying to sell a house. It will cost her $1000 to list the house. If she sells it herself, she will earn 6% of the selling price. If someone else sells it off of her listing, she will earn 3% of the selling price. If it remains..

User Account

All Pages