What is the price of stock

Assignment Help Financial Management

Reference no: EM132020327

1. Etling Inc.'s dividend is expected to grow at 7% for the next two years and then at 3% forever. If the current dividend is $3 and the required return is 16%, what is the price of the stock?

a. $25.10

b. $26.15

c. $27.58

d. $25.54

e. $29.45

2. This morning, Alicia bought a ten-year 6% coupon bond that pays interest semi-annually. She paid $994 for a $1,000 bond. If the market interest rate on this type of bond declines to 5.5% tonight, how much will Alicia receive for her first interest payment?

a. $60.00

b. $35.00

c. $69.58

d. $30.00

e. $65.00

Reference no: EM132020327

Questions Cloud

What is the standard deviation of stock : what is the standard deviation of stock A if it has an expected return of .27% in a boom economy, and an expected return of 3% in a recession?

What is cost of equity : A firm is worth $1,400, has a 35% tax rate, total debt of $600, an unlevered return of 15%, and a cost of debt of 7%. What is the cost of equity?

What is geometric average return : What is the average rate of return for this period of time? What is the geometric average return?

What is ernst pre-tax cost of debt : The bonds are currently quoted at 99 percent of face value. What is Ernst's pre-tax cost of debt?

What is the price of stock : Etling Inc.'s dividend is expected to grow at 7% for the next two years and then at 3% forever. what is the price of the stock?

Nominal return and the expected inflation rate : If investors require a 6.5% nominal return and the expected inflation rate is 3.5%, what is the expected real return?

What is the present value of the cca tax shield : What is the present value of the CCA tax shield on the machine if it is sold at the end of the sixth year for $24,000,

How much did your grandmother originally invest : Today, your grandmother gave you a gift of $22,000 to help pay for your college education. How much did your grandmother originally invest?

How much did your grandmother originally invest : How much did your grandmother originally invest?

User Account

All Pages