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A: Part a: We can determine the values by using the steps below:
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A: SOLUTION:- Dividend (D0)= $1.50Required rate of return (rs) =10.1%Growth rate (g)= 4.0% Calculation…
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![A stock that pays a constant dividend of $1.50 forever currently sells for $10.71. What is the required
rate of return?
O 10%
O 12%
O 13%
O 14%
O 15%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F537cca7c-787a-475d-9aba-926e9a602de3%2F89ae900d-2ce8-46b4-ab3b-1743e0bd9126%2F02mehcd_processed.jpeg&w=3840&q=75)
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- Suppose you have just purchased a share of stock for $58.50. You expect a dividend next period of $2.50 which will grow at a rate of 15% indefinitely. What must your expected rate of return be on the stock you have just purchased? Select one: A. 4.27% B. 15.38% C. 19.27% D. 19.91% E. None of the abovestock X just paid a dividend of $1 and is expected to pay a $3 dividend per year for the foreseeable future. Given that the required rate of return on stock X is 5%, what would be the fair price of stock X 3 year from today? 1. $3.86 2. 4 3. 3.47 4. 4.86 5. 60Compute the annual expected return on a stock which has a market price of $112, pays no dividend and is expected to sell for $140+u dollars in 5 years? U=12
- 0. GM common stock pays a constant annual dividend $1/share forever and its stock price is $20. If risk free rate is 1% APR, what is the risk premium of the stock?What is the rate of return if you purchase a stock today for $35 and sell it in five years for $43? Assume the stock pays an annual dividend of $2.8. Answer choices: 10.43% 12.01% 11.62% 9.79%What would be the approximate expected price of a stock when dividends are expected to grow at a 26% rate in each of years 2 and 3, and then g at a constant rate of 8% if the stock's required return is 16% and next year's dividend will be $4.80? Multiple Choice $78.35 О $72.86 $79.42 О $87.24
- The preferred stock of Placer Corp currently sells for OMR44.44 per share. The annual dividend of OMR4 is fixed. Assuming a constant dividend forever, what is the rate of return on this stock? Select one: a. 9.0% O b.11.0% О с 8.0% O d. 10.0% O e.7.0%You are considering the purchase of preferred stock that is currently selling for $57.25 and promises an annual dividend of $4.50 dividends. What is the implied return on this investment? O 7.86% O 12.72% O 8.30% O 9.61% 11.35%If Do $3.30, g (which is constant) = 3.5%, and Po= $52, then what is the stock's expected dividend yield for the coming year? O a 6.57% O b. 6.80% € 6.35% Od 7.03% O 6.13%
- (TCO D) A stock pays an annual dividend of $2.50 and that dividend is not expected to change. Similar stocks pay a return of 10%. What is PO?An investor expects a14% return on a $ 50 stock that pays a dividend of $ 2.50. Was is the implied capital gain rate on the price appreciation?Suppose the stock price is $ 95 and the continously compounded interest rate is 7 %. a) What is the price of a 6 - month forward price, assuming dividends are zero? $ ? b) If the 6 - month forward price is $ 96.55, what is the annualized forward premium? % ? c) If the 6 - month forward price is $ 96.55, what is the annualized continous dividend yield? % ?
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