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Question - Future Dividends and Future Price
Q1. Suppose the company is expected to pay a divided of $2.5 and the required rate of return is 10% and the growth rate is 4%. What is the price of the stock after 5 years? after 10 years? after 12 years?
Q2. Suppose the company just paid a divided of $2.5 and the required rate of return is 10% and the growth rate is 4%. What is the price of the stock after 5 years? after 10 years? after 12 years?
Q3. Suppose ABC, Inc. is expected to pay a dividend of $10 next year. that is, D1 = $10. The dividends are expected to grow by 3%. What is D8, D15, D25?
Q4. Suppose ABC, Inc. just paid a dividend of $10. that is, D0 = $10. The dividends are expected to grow by 3%. What is D8, D15, D25?
Consider the second financing option. What is the weighted average cost of capital of the firm? What is the equity holders' rate of return?
If the yield on AA rated bonds is still 290 basis points ? higher than a gov't bond, what is the new price of the bond? (note: round to the nearest cent)
Which bond would most likely possess the least degree of interest rate risk? A. 8% coupon rate, 15 years to maturity B. 10% coupon rate, 10 years to maturity C. 12% coupon rate, 8 years to maturity D. 8% coupon rate, 12 years to maturity
The stock of Sugar High is expected to produce the following returns given various states of the economy. What is the expected return on this stock?
Discuss the arguments used to support the concept of efficient capital market. Describe and contrast 3 forms of the efficient market hypothesis (EMH) theory.
The cost of property A is $120,000, while the cost of property B is $180,000. How will the $180,000 in borrowing be linked to the two new properties?
Jimmy has fallen on hard times recently. Last year he borrowed $341,000 and added an additional $91,500 of his own funds to purchase $432,500 of undeveloped real estate. For each of the following independent situations, indicate the amount Jimmy must..
The expected dividend one year from now is R4.00. What is Tangshan dividend growth rate assuming that dividends are expected to grow at a constant rate forever?
One year from now Netflix is expected to pay a dividend of $8.15. What is the expected value of the stock as of today as well as the dividend yield
Polk Incorporated issued $460,000 of 13% bonds on July 1, 2013, for $475,643.67. The bonds were dated January 1, 2013, pay interest on each June 30 and December 31, are due December 31, 2017, and were issued to yield 12%. Polk uses the effective inte..
Biopharma-Australia can borrow fund in Australia. How much the Biopharma-Australia will make profit or loss in A$ from this parallel loan agreement in one year.
Why do companies use a separate account for payroll? Pick a company, tell the constants and the items that are constant in payroll.
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