Find the expected dividend for next 3 years

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Reference no: EM133205913

Q1. A Company borrows $286,900 for building repairs.  Setup an amortization schedule if the Company agrees to make semi-annual payments for 2½ years at 10% APR. 

Q2.Allen Wrench Company is expected to pay a $1.00 per-share dividend at the end of the year (D= $1.00).  The stock sells for $20 per share and its required rate of return is 11 percent.  The dividend is expected to grow at a constant rate, g, forever.  What is the growth rate, g, for this stock?

Q3. What is the market value of a bond that will pay a total of 40 semi-annual coupons of $50 per period, over the remainder of its life? Assume the bond has a $1,000 face value and a 14% yield to maturity.

Q4.Suppose that Cosstko has stocks with expected dividend of $10 in period 1. The company is expected to grow at the rate of 5% and the required rate of return of stocks for the company is 15%. What is the fair price of the Cosstko stock today

Q5.  Your bank offers to sell you some shares of Best Buy common stock that just paid a dividend of $2.  You expect the dividend to grow at the rate of 5 percent per year for the next 3 years, and, if you buy the stock, you plan to hold it for 3 years and then sell it.

  1. Find the expected dividend for each of the next 3 years; that is, find D1, D2, D3
  2. If you plan to buy the stock, hold it for 3 years, and then sell it for $34.73, what is the most you should pay for it? 
  3. Calculate the present value of this stock-assume g = 5% and is constant

Reference no: EM133205913

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