Horse and Buggy Inc. is in a declining industry. Sales, earnings, and dividends are all shrinking at a rate of 5% per year. a. If r = 10% and DIV1 = $6, what is the value of a share? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. If r = 10% and DIV1 = $6, What price do you forecast for the stock next year? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. If r = 10% and DIV1 = $6, What rate of return should you expect if you buy the stock today and sell it in one year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Horse and Buggy Inc. is in a declining industry. Sales, earnings, and dividends are all shrinking at a rate of 5% per year. a. If r = 10% and DIV1 = $6, what is the value of a share? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. If r = 10% and DIV1 = $6, What price do you forecast for the stock next year? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. If r = 10% and DIV1 = $6, What rate of return should you expect if you buy the stock today and sell it in one year? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
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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Horse and Buggy Inc. is in a declining industry. Sales, earnings, and dividends are all shrinking at a rate of 5% per year.
a. If r = 10% and DIV1 = $6, what is the value of a share? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
b. If r = 10% and DIV1 = $6, What price do you
c. If r = 10% and DIV1 = $6, What
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