User Account

All Pages

What is the discount rate on the stock

Assignment Help Financial Accounting
Reference no: EM132755922

Question - Top hedge fund manager Sally Buffit believes that a stock with the same market risk as the S&P 500 will sell at year-end at a price of $41. The stock will pay a dividend at year-end of $2.00. Assume that risk-free Treasury securities currently offer an interest rate of 1.6%.

Average rates of return on Treasury bills, government bonds, and common stocks, 1900-2017 (figures in percent per year) are as follows.

Portfolio

Average Annual Rate of Return (%)

Average Premium (Extra return versus Treasury bills) (%)

Treasury bills

3.8

 

Treasury bonds

5.3

1.5

Common stocks

11.5

7.7

Required - What is the discount rate on the stock?

Reference no: EM132755922

Questions Cloud

What the present value to be received in three years : What's the present value of $100 to be received in 3 years if the interest rate is 10%, annual compounding? What's the future value of $100 after 3 years
Draw time lines for a lump sum cash flow at the end : Draw time lines for a $100 lump sum cash flow at the end of Year 2; an ordinary annuity of $100 per year for 3 years; and an uneven cash flow
What is the christian concept of the imago dei : What is the Christian concept of the imago Dei? How might it be important to health care, and why is it relevant? According to your worldview, what value does.
Why are some costs like research in financial accounting : What is the difference between product costing as used for financial reporting purposes, and as used by internal managerial purposes?
What is the discount rate on the stock : Assume that risk-free Treasury securities currently offer an interest rate of 1.6%. What is the discount rate on the stock
Determine what rate of return are offering on the investment : Find what rate of return are they offering on the investment? Someone offers to sell to you a financial contract that will pay $150 at the end of each
Discuss about the common endocrine disorders : This week you have learned about common Endocrine disorders in the Adult and Geriatric patient. For the purpose of this discussion select one of the following.
Post the july journal entries to the t-accounts : Post the July journal entries to the following T-accounts and compute ending balances. Cash (111) Tax Preparation Revenue Prepaid Insurance
How they met a course competency or course objectives : This reflection journal also allows students to outline what they have discovered about their professional practice, personal strengths and weaknesses.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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