You deposit each year to achieve your goal

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Reference no: EM131853641

1. Thirsty Cactus Corp. just paid a dividend of $1.60 per share. The dividends are expected to grow at 40 percent for the next 10 years and then level off to a 7 percent growth rate indefinitely. Required : If the required return is 12 percent, what is the price of the stock today?

a. $393.10

b. $7.49

c. $377.68

d. $318.88

e. $385.39

2. You want to have $4.5 million in real dollars in an account when you retire in 30 years. The nominal return on your investment is 9 percent and the inflation rate is 4.5 percent. What real amount must you deposit each year to achieve your goal? (Do not round your intermediate calculations.)

a. $76,217.17

b. $33,013.58

c. $80,028.03

d. $79,265.86

e. $72,406.31

Reference no: EM131853641

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