What is the pdv of the same stock

Assignment Help Financial Management

Reference no: EM131881319

Question

a. What is the appropriate price, or present-day value (PDV), of a share of stock that has a constant yearly dividend of $1, if the market interest rate (i) is 2%?

b. What is the PDV of the same stock if the market interest rate rises to 4%? c. Use those two answers to explain why stockholders hate to see interest rates go up.

Reference no: EM131881319

Questions Cloud

Discuss the benefits of the consolidating multiple companies : From a conceptual and practical standpoint please discuss the benefits and/or negatives of the consolidating (financial statements) multiple companies.

How much would be the january amount recorded to expense : The purchase was recorded to Prepaid Insurance. How much would be the January 31 amount recorded to expense (use two decimals).

Differences between independent and dependent demand : 1. How can forecasting improve your operations and supply chain processes? What are the differences between independent and dependent demand?

Why is efficient inventory management important : Why is efficient inventory management important and what are the functions of inventory?

What is the pdv of the same stock : What is the PDV of the same stock if the market interest rate rises to 4%? c. Use those two answers to explain why stockholders hate to see interest rates go up

How recent developments in unitisation : You have been asked to give a detailed explanation to your Managing Director in relation to how recent developments in Unitisation, Containerisation

Compute the cost per equivalent unit for materials : Billinstaff Industries uses the weighted-average method in its process costing system. Compute the cost per equivalent unit for materials, for labor

Activities of crossdocking and activity based costing : Discuss how the supply chain activities of Crossdocking and Activity Based Costing enable transport operators to reduce costs

Calculate the convertible bond option value : The conversion ratio is 20. The stock is currently selling for $45. Calculate the convertible bond’s option value.

User Account

All Pages