Activity 1: Direction: Consider the following stocks and solve for the missing element in each row: Stock Current year's dividend (Php) Expected growth in dividend 5% Required rate of return Value of a share of Stock (Php) 20 7% 3% 5% 520 35 10% 735 ABC
Activity 1: Direction: Consider the following stocks and solve for the missing element in each row: Stock Current year's dividend (Php) Expected growth in dividend 5% Required rate of return Value of a share of Stock (Php) 20 7% 3% 5% 520 35 10% 735 ABC
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Transcribed Image Text:Activity 1:
Direction: Consider the following stocks and solve for the missing element in each row:
Stock
Current year's
dividend (Php)
Required rate of
Value of a share of
Expected growth in
dividend
Stock (Php)
return
20
5%
7%
3%
5%
520
35
10%
735
Activity 2:
Direction: Find the nond discount and purchase price of the following:
Face Value
Bond rate
Term
Yield Rate
1. Php 34, 000
2. Php 9, 000
7 %, m= 2
9%, m = 4
4 years
2 years
10%, m 2
9.5%, m = 4
Assessment:
Direction: Answer the following problems. Show your solutions and answers on the sheet provided.
1. The dividend on a common stock of a certain company will be Php 60 on the first year, Php 85 on the second
year, and Php 120 on the third year. You can sell the stock after you received the dividend of Php 200 at the end
of three years. If you require a 9% retum on your investment, how much will you be willing to pay for a share of
this stock today?
2. What is the purchase price for a Php 55, 000 bond with a periodic rate of 8% converted quarterly for 15 years to
yield the purchaser 12%, compounded quarterly?
ABC
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