How much should you be willing to pay for stock

Reference no: EM131937402

Question: Assume that you plan to buy a share of IBM stock today and to hold it for 2 years. Your expectations are that you'll receive a dividend of 19.00 at the end of Year 1 and a dividend of $19.25 at the end of Year 2. In addition, you expect to sell the stock for $150 at the end of Year 2. If your expected rate of return is 11 percent, how much should you be willing to pay for this stock today?

Reference no: EM131937402

Questions Cloud

Consider hypothetical five year currency swap agreement : Consider a hypothetical 5 year currency swap agreement between BMW and the british aluminium entered into on February 1 2007.

How many units could possibly buy : Assume that one would invest on a mutual fund. looking at the company's financial statement, its total assets reached to 30M but with outstanding long term debt

Term Paper - Quantitative Analysis for Business Decisions : BSAD 503: Quantitative Analysis for Business Decisions Term Paper Assignment. Submit an independent research paper or applied statistical analysis project

Which currency is expected to appreciate : What is the current value of one peso in terms of U.S. dollars? Given the relative inflation rates, what will the exchange rates be 1 year from now?

How much should you be willing to pay for stock : Assume that you plan to buy a share of IBM stock today and to hold it for 2 years. Your expectations are that you'll receive a dividend of 19.00.

How much will you accumulate in your plan : Assume that you pay the contribution of $10,000 to your pension plan at the end of each year (now it is the beginning of the year).

What is the reward-to-volatility ratio of risky portfolio : What is the reward-to-volatility ratio (S) of your risky portfolio and your client's portfolio? (Do not round intermediate calculations).

What is the rate of interest in given problem : Assume that you make the following three investments: 1500 dollars now, 600 dollars in two years, and 750 dollars in 5 years. All three investments earn simple.

What fee would you attempt to negotiate for the contract : What fee would you attempt to negotiate for this contract? Would your answer change if your research indicated the other sources for similar work have usually.

User Account

All Pages