Need answer please Carl Patterson likes investing in stocks that paydividends. Carl owns 120 shares of a local utilitycompany. The stock pays a regular annual dividendin the amount of $5.50 per share and the companyhas indicated that the dividend will stay the samefor a long time. If Carl reinvests his dividends eachyear and the dividends earn a return of 7 percenteach year, how much will Carl accumulate in 14years?

Given information, Number of shares owned = 120Annual dividend per share = $5.50 Rate of return (r)…

Answered: Carl Patterson likes investing in…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter2: The Domestic And International Financial Marketplace

Section: Chapter Questions

Problem 2P

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Carl Patterson ikes investing in stocks that pay dividends. Carl owns 100 shares of a local utility company. The stock pays a regular annual dividend in the amount of $4.50 per share, and the company has indicated that the dividend will stay the same for a long time. if Cart reinvests his dividends each year and the dividends earn a return of 7 percent each year, how much will Car accumulate le 15 years? Use Exhibit 1-A Exhibit 18. Exhibit 1-C. Exhibit 10. Note: Use appropriate factor(s) from the tables provided. Do not round your intermediate calculations. Round time value factor to 3 decimal places and final answer to 2 decimal places. Future value annuity
Alex purchases 100 stocks in a company that pay dividends of $10 every year for the next 5 years. However, the prevailing interest rates at which he can discount future earnings changes from 4% in the first 3 years to 6% in the next 2 years. What is the present value of the dividend income?
(Short answer will be fine)Fred expects to earn a total of 15 percent on his investments. He recently purchased shares of CC Corporation at a price of $20 a share. The company will pay a dividend of $1 next year. a)Based on constant dividend growth model, how many percent of the price of CC stock needs to change if Fred is to achieve his 15 percent rate of return? b)Fred owns 1000 shares in CC Corporation. At the company’s annual general meeting, five director seats are available for election. Fred can cast 4000 votes to one candidate and 1000 to the other. What is the type of voting system?
Becky Martinez owns stock in GBX Corporation. The GBX stock has a current market value of $70 a share. If Becky receives $1.40 a year in dividends, what is the dividend yield?
Bob has been investing $2,250 in stock at the end of every year for the past 10 years f the acourt amt on $34, 780, what was his annual return on this investment?
None
Greg purchased 200 shares of XYZ stock at $90 per share 8 years ago. Today he told all 200 shares for $20,000. What was his average annual compound return on this investment (ignoring taxes and inflation)? (Please use and round to two decimals) a. 1.01 b. 1.46 c. 1.54 d. 1.33
Jonathan purchased some corporate stock 8 years ago for $12,000. He received quarterly dividends of $225 at the end of each quarter for the first 5 years, nothing for the sixth year, and $250 at the end of each quarter for the last 2 years. Immediately after receiving the last quarterly dividend, Jonathan sold the stock for $15,385. What was his annual rate of return? (IRR) Round your rate to the nearest tenth of a percent.
Bob has been investing $4, 750 in stock at the end of every year for the past 10 years. If the account is currently worth $73, 240, what was his annual return on this investment?
After reading this chapter, it isn't surprising that you're becoming an investment wizard. With your newfound expertise, you purchase 100 shares of KSU Corporation for $29.52 per share. Assume the price goes up to $36.77 per share over the next 12 months and you receive a qualified dividend of $0.69 per share. What would be your total return on your KSU Corporation investment? Assuming you continue to hold the stock, calculate your after-tax return. How is your realized after-tax return different if you sell the stock? In both cases assume you are in the 25 percent federal marginal tax bracket and 15 percent long-term capital gains and qualified dividends tax bracket and there is no state income tax on investment income. Your total rate of return on your KSU Corporation investment is % (Round to two decimal places.) Assuming you continue to hold the stock, your after-tax rate of return is%. (Round to two decimal places) Your realized after-tax rate of return if you sell the stock is%.…
Suppose Alex has an opportunity to buy shares of Sunnyland Snacks Company. The shares are expected to pay a dividend of $2.50 per share in one year and to sell for $92.00 per share at that time. a. Suppose the current interest rate on safe assets is 5% and Alex believes that investing in Sunnyland is not risky. How much would Alex be willing to pay today for each share of the company? b. Suppose the current interest rate on safe assets is 5%. Alex is willing to pay at most $85.90 for each share of Sunnyland today. Calculate Alex’s risk premium.

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