What is the implied rate of return on this stock

Assignment Help Financial Management

Reference no: EM13877669

A stock will pay a dividend of $4 at the end of the year. It sells today for $100 and is expected to sell in one year for $105. What is the implied rate of return on this stock? Enter in percent and round to two decimal places. Please show work.

Reference no: EM13877669

Questions Cloud

Creditworthy corporate customers for short-term loans : Which one of the following is the interest rate that the largest commercial banks charge their most creditworthy corporate customers for short-term loans?

Based on effective interest rates : The First City Bank pays 6.6 percent interest, compounded annually, on time deposits. The Second City Bank pays 6.5 percent interest, compounded monthly. Based on effective interest rates, in which bank would you prefer to deposit your money?

Firm sells for cash only-it is thinking of offering credit : Your firm sells for cash only; but it is thinking of offering credit, allowing customers 90 days to pay. Customers understand the time value of money, so they would all wait and pay on the 90th day. To carry these receivables, you would have to borro..

What is the implied rate of return on this stock : A stock will pay a dividend of $4 at the end of the year. It sells today for $100 and is expected to sell in one year for $105. What is the implied rate of return on this stock? Enter in percent and round to two decimal places. Please show work.

Increase dividends at rate-what is the value of the stock : A stock will pay dividends of $1, $3, and $4 over the next three years, and then increase dividends at a rate of 10% afterwards. Its required rate of return is 20%. What is the value of the stock? Round to the penny. Please show work.

Liquidity premium are zero for treasury securities : A 5-year Treasury bond has a 4.85% yield. A 10-year Treasury bond yields 6.3%, and a 10-year corporate bond yields 8.65%. The market expects that inflation will average 2.1% over the next 10 years (IP10 = 2.1%). (Hint: Remember that the default risk ..

Performance evaluation and compensation formulas : Explain how a firm may have to change its performance evaluation and compensation formulas for managers if it adopts a “real options” approach

User Account

All Pages