FI 311 Assignment 7

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School

Michigan State University *

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Course

311

Subject

Finance

Date

Apr 3, 2024

Type

docx

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1

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Mark Potts FI 311 Assignment 7 Stock Choice:   Chevron (NYSE: CVX) (Annual dividend amount: $6.04) Find its dividend and then apply the zero-growth dividend formula using 10% as the required rate of return (the return rate the book gives for large-cap stocks) V= 6.04/.10  V= $60.40 Please state the stock's current trading price. Chevron Current Trading Price: $142.95 Please then finally state whether or not you should buy or sell the stock based upon these calculations. Considering that the stock’s current trading price is $142.95 and I valued it at $60.40 using the zero-growth dividend model, I would not buy the stock. The required rate of return would have to be below 5% just to be near the current trading price. Source Link: https://www.fool.com/investing/stock-market/types-of-stocks/dividend-stocks/ high-yield-dividend-stocks/
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