What is the price for stock a you have to pay now

Assignment Help Financial Management

Reference no: EM132039378

Please use the following information for questions 1-4 (be careful about rounding).

Stock A pays a dividend of $3 per share next year. The discount rate is 10%.

1. If you hold the stock for one year, what is the price for stock A you have to pay now (P0) ?

A) $30

B) $33

C) $36

D) $ 35

E) None of the above

2. If you hold the stock for two years, what is the price for stock A you have to pay now (P0)?

A) $30

B) $33

C) $35

D) $40

E) None of the above

3. If you hold the stock for three years, what would be the price for stock A three years from now (P3)?

A) $39

B) $33

C) $36

D) $ 30

E) None of the above

4. If you hold the stock for two years, what would be the price for stock A two years from now (P2)?

A) $30

B) $33

C) $36

D) $35

E) None of the above

Reference no: EM132039378

Questions Cloud

Stp when dealing with multiple links in a switched network : Do you think that configuring ether channels is a better option than configuring STP when dealing with multiple links in a switched network?

Explain the importance of ethics in the workplace : What were the ramifications of the decision that was made? Do you currently agree with the action? Why or why not?

Explain why we use k-means with multiple initializations : Explain how PCA and clustering can be used together, when clustering high-dimensional data.

Which rmbs is affected more by an interest rate change : Which RMBS is affected more by an interest rate change? Why? Which RMBS has a higher duration? Why?

What is the price for stock a you have to pay now : If you hold the stock for one year, what is the price for stock A you have to pay now (P0) ?

Plan an elaborate event : Desire to completely plan out a wedding with all of its details -- pre-wedding activities as well.

Largest and smallest : Design a program with a loop that lets the user enter a series of numbers. The user should enter -99 to signal the end of the series.

Calculate the payback period for each of the three projects : Calculate the payback period for each of the three projects. Ignore income taxes. Using the payback method, which projects should Andrews choose?

Present your communication strengths : This exercise involves analyzing a communication technique-presentations. On a daily basis, it is often expected that professionals be proficient.

User Account

All Pages