Assume that the risk-free rate of interest is 5% and the expected rate of return on the market is 17%. A share of stock sells for $64 today. It will pay a dividend of $2 per share at the end of the year. Its beta is 1.0. What do investors expect the stock to sell for at the end of the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Expected stock price
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A: Beta = 0.75 P0= $50 D1 = $2 Rf = 4% RM = 7% Where, D = Expected Dividend Po = Current Price Rf =…
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A: given, d0 = $4.42 roe=8% dividend payout = 50% beta= 1.62 rf=3.45% rm=18%
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Q: A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return…
A: Stock's Current Price = Dividend / ( Required rate of return - growth rate)
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A: Pricen = Dividendn+1 / ( Required rate - Growth rate )
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A: annual dividend = 7 Time = perpetuity Discount rate = 10% Assuming face value to be =100
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A: The following flow chart shows the price up and drop in the stock :
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A: Given that;Risk free rate is 6%Market return is 16%Beta is 1.2
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A: Expected Dividend (D1) = $0.50 Dividend growth rate (g) = 4% Required Rate of Return (R) = 12%…
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A: In this we have to use dividend discount model to calculate the price of stock.
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A: Dividend (D1)= 3 Growth rate =6.70% Required return =11.90%
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A: Computation:
Q: What is the price of the stock today?
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- Crisp Cookware’s common stock is expected to pay a dividend of $3 a share at the end of this year (D1 = $3.00); its beta is 0.8. The risk-free rate is 5.2%, and the market risk premium is 6%. The dividend is expected to grow at some constant rate g, and the stock currently sells for $40 a share. Assuming the market is in equilibrium, what does the market believe will be the stock’s price at the end of 3 years (i.e., what is )?Question 03 Current forecasts are for XYZ Company to pay dividends of OMR 2.000, OMR 2.350, OMR 2.600and OMR 2.850 over the next four years, respectively. At the end of four years you anticipate selling your stock at a market price of OMR 108.58. Required: What is the price of the stock given a 12% expected return?Trump corporation ix expected to pay a dividend of $3.00 next year (D₁) and has a beta of 1.2. Dividends are expected to grow at 3 percent into the foreseeable future. The expected return on the market is 0.12 the risk-free rate is 0.01. What is the required return on Trump stock? Answer should be to 2 decimals--- Ex: .34 Be sure to round properly. ex. .336 rounds to .34 and .342 rounds to .34 Your Answer: Answer
- #30 The risk-free rate is 2.87% and the market risk premium is 8.60%. A stock with a β of 1.55 just paid a dividend of $1.72. The dividend is expected to grow at 24.81% for three years and then grow at 4.29% forever. What is the value of the stock? Answer format: Currency: Round to: 2 decimal places.#26 The market price of a stock is $21.68 and it is expected to pay a dividend of $1.13 next year. The required rate of return is 11.04%. What is the expected growth rate of the dividend? Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924))Rework Table 74 for horizon years 1, 2, 3, and 10, assuming that investors expect the dividend and the stock price to increase at only 6% a year and that each investor requires the same 12% expected return. The company will pay a dividend of $3 at the end of the first year. What value would an investor place on the stock? Do not round intermediate calculations. Round your answers to 2 decimal places. Horizon (years) 1 2 3 10 PV (Dividends) $ 3.18 PV (Terminal Price) Value per Share S 50.00 53.00 50.17 71.95
- QUESTION 1 Suppose you purchased a stock a year ago. Today, you receive a dividend of $16 and you sell the stock for $99. If your return was 11%, at what price did you buy the stock? QUESTION 2 A stock's risk premium is equal to the: a. risk-free rate plus the expected market risk premium b. expected market risk premium times beta c. expected market return times beta d. treasury bill yield plus the expected market return.Question A certian stock pays dividends continuously at a rate of ố per year. The current price of the stock is S. If the continuously compounded risk-free interest rate is 6%, then the 2-year forward price of the stock is 135,80293. If the continuously compounded risk-free interest rate is 10 %, then the 1-year forward price of the stock is 134.76665 Determine S Possible AnswerS 113.095 123.456 C 128.494 D 133.9381 A share of stock with a beta of 0.85 now sells for $60. Investors expect the stock to pay a year-end dividend of $2. The T-bill rate Is 4%, and the market risk premium is 7%. If the stock is perceived to be fairly priced today, what must be investors' expectation of the price of the stock at the end of the year? (Do not round Intermediate calculations. Round your answer to 2 decimal places.) Stock price sis.docx WalmartAnalysis.pdf Show All x
- Please answer both A stock is currently selling for $90.83 and is expected to sell for $102.27 in 1 year. If the company pays a dividend of $2.63 what is the stock's HPR? QUESTION 2 A stock has a beta of 1.18. The risk free rate is 0.974% and the market risk premium is 5%. What is the fair return on the stock?Required: A share of stock is now selling for $75. It will pay a dividend of $6 per share at the end of the year. Its beta is 10. What must investors expect the stock to sell for at the end of the year? Assume the risk-free rate is 5% and the expected rate of return on the market is 13% (Round your answer to 2 decimal places) Answer is complete but not entirely correct. $ 80.00 ⒸQuestion 1 (A) Suppose the LKM stock price is AUD 30, and the continuously compounded interest rate is 5%. (i) What is the 6-month forward price, assuming dividends are zero? (ii) If the 6-month forward price is AUD 30.50, what is the annualized forward premium? (iii) If the 6-month forward price is AUD 30.50, what is the annualized continuous dividend yield (B) Assume an investor has used fifty futures contracts to hedge the price exposure of gold. Each futures contract is on 5000 ounces of gold. At the time the hedge is closed out, the basis is $0.30 per ounce. What is the effect of the basis on the hedger’s financial position? (i) If the trader is hedging for the purchase of gold (ii) If the trader is hedging for the sale of gold (C) Suppose the futures price is 1100 and you wish to acquire a $2.2 million position in the S&P index. (i) How many futures contracts will you buy or sell, if the current value of one futures contract is $275,000? (ii) Suppose that…