What can you conclude about the dividend yield

Assignment Help Financial Management
Reference no: EM132018046

Suppose the S&P 500 is at 906, and a one-year European call option with a strike price of $575 has a negative time value.

If the interest rate is 4%, what can you conclude about the dividend yield of the S&P 500? (Assume all dividends are paid at the end of the? year.)

Reference no: EM132018046

Questions Cloud

What will be the effect on cash flows of this sale : If your compant's marginal tax rate is 15%, what will be the effect on cash flows of this sale (i.e , what will be after-tax cash flow of this sale)?
Under what circumstances will the seller of the option earn : Suppose that a September put option with a strike price of $95 costs $10.0. Under what circumstances will the seller (or writer) of the option earn a profit?
Is there an arbitrage opportunity here : Suppose the spot and 3-month forward rates on the Brazilian real (BRL) are $1 = BRL3.2573 and $1 = BRL3.3550, respectively.
Calculate taxable income and taxes payable : Calculate taxable income and taxes payable assuming the firm uses FIFO (first-in, first-out) for inventory costing purposes.
What can you conclude about the dividend yield : Suppose the S&P 500 is at 906, and a one-year European call option with a strike price of $575 has a negative time value.
What are the firms current capital structure weights : If the firm also has 12,000 bonds outstanding and they're selling at 97 percent of par, what are the firm's current capital structure weights?
How much money will you have in the account : Suppose that you save $1,000 a year for 20 years, and you invest the money to earn 5% a year. How much money will you have in the account after 20 years?
What is the risk premium on a portfolio invested : What is the risk premium on a portfolio invested 40% in GM and 60% in Ford, if they have betas of 1.4 and 1.0 respectively?
How much house can you qualify to purchase assuming : How much house can you qualify to purchase assuming you have a good credit score?

Reviews

Write a Review

Financial Management Questions & Answers

  A firm just paid their annual dividend

A firm just paid their annual dividend of $2.0 a share. They recently announced that all future dividends will be increased by 5% annually. What is one share of this stock worth to you if you require a 15% rate of return?

  About the require an initial investment

Archer Daniels Midland Company is considering buying a new farm that it plans to operate for 10 years. The farm will require an initial investment of $12.00 million. This investment will consist of $2.00 million for land and $10.00 million for trucks..

  How much should stock price change

Consider firm that had been priced using 14.00 percent growth rate and 19.00 percent required rate. How much should the stock price change.

  Whats the amount of this home equity loan

A person purchased a house 20 years ago for $270,000 by paying 20% down and signing a 30-year mortgage at 9.45% compounded monthly. The current appraised value of the house is $390,000. If a bank will loan this person 95% of the equity in the house, ..

  What is the best institutional framework for reducing fraud

Or is there an alternate explanation? What is the best institutional framework for reducing fraud?

  University is offering charitable gift program

A University is offering a charitable gift program. what is the value of this deferred annuity today on his 50th birthday?

  Calculate the return and risk of a two asset portfolio

Calculate the return and risk of a two asset portfolio. Asset 1 has an annualized expected real return of 5.5% and a weight of 35% in the portfolio. Asset 2 has an annualized expected real rate of return of 2.0% and a weight of 40% in the portfolio.

  What thoughts do you have about sara lee debt financing

In July 1994, Sara Lee's Netherlands division sold 200 million Dutch guilders ($127 million) of three-year bonds at 35 basis points over comparable Netherlands government bonds. In January, its Australian division sold 51 million British pounds ($78 ..

  What is your opinion of this strategy

Some consumers might consider purchasing a new car with a car loan, while using credit cards to cover other purchases, and making only the minimum required payment to the credit card company each month. What is your opinion of this strategy?

  The binomial one-period model and the put-call parity model

The binomial one-period model and the put-call parity model share both share the following characteristic:

  Favourite art museum by establishing funds

A wealthy art collector has decided to endow her favourite art museum by establishing funds for an endowment which would provide it with $1,000,000 per year for acquisitions into perpetuity. The art collector will give the endowment upon her fiftieth..

  Raise additonal capital to fund its upcoming expansion

Olsen Outfitters Inc. believes that its optimal capital structures consists of 60% common equity ahd 40% debt, and its tax rate is 40%. Olsen must raise additonal capital to fund its upcoming expansion. What is the WACC for the last dollar raised to ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd