Question 4 2 pts Dividends for ABC Corporation are expected to be $2 per share one year from today, $3 per share two years from today, $5 per share three years from today, $6 per share four years from today, and $7 per share five years from today. Thereafter they are expected to grow by 4% per year. If investors demand a 12% rate of return what is the price per share today? 67.16 73.35 0 78.60 O 76.78

Question 4 2 pts Dividends for ABC Corporation are expected to be $2 per share one year from today, $3 per share two years from today, $5 per share three years from today, $6 per share four years from today, and $7 per share five years from today. Thereafter they are expected to grow by 4% per year. If investors demand a 12% rate of return what is the price per share today? 67.16 73.35 0 78.60 O 76.78

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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PS #2 Type A: Brite Events has been growing at a rate of 20% per year, and you expect this growth rate in earnings and dividends to continue for another 4 years. The last dividend paid was $2, and if the steady (i.e., constant) growth rate after 4 years is 58, what should the stock price be today? Assume that the stock has a beta of 2.0, Treasury bills yield 3%, and the market risk premium is 6%.
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Problem 10-4 Calculating Returns [LO 1] Suppose you bought a bond with an annual coupon rate of 8.9 percent one year ago for $912. The bond sells for $956 today. a. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What was your total nominal rate of return on this investment over the past year? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. If the inflation rate last year was 4.4 percent, what was your total real rate of return on this investment? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Total dollar return b. Total nominal rate of return % c. Total real rate of return %
Q 6. Suppose Company X has a stock that delivers cash flows every year. The amount of the first cash flow is $A and since then will rise by B% each year forever. The opportunity cost of capital is estimated at C%. a) If the first cash flow comes in year 1, what is the present value of this series of cash flows? b) If the first cash flow comes in year 4, what is the present value of this series of cash flows? c) If the first cash flow comes today, what is the present value of this series of cash flows? $ 2,970.00 7.00% 11.00% A B с
Question 1 0 out of 2 points The expected return on the market is 12.07%, the risk-free rate is 4.94%, and the tax rate is 22.00%. Semper Fun Sports has 300,000 common shares outstanding that are priced at $41.90 per share and have an expected return of 16.99% and an expected real return of 14.96%. Last year, Semper Fun Sports common stock had a return of 11.04%. The company also Finally, the company has 10,000 bonds outstanding with a coupon 400,000 shares of preferred stock outstanding that are priced at $15.65 per share and have an expected return of 13.24% and an expected real return of 11.00%. Last year, Semper Fun Sports preferred stock had a return of 8.92%. rate of 9.50%, yield-to-maturity of 4.35%, current yield of 8.79%, face value of $1,000.00, and price of $1,300.00. What is the weighted average cost of capital for Semper Fun Sports?
QUESTION 7 Manchester plc is expected to pay annual dividends of £1.50, £1.75 and £2.00 per share at the end of each of the next three years (i.e., from t-1 to t=3). After year 3, annual dividends are expected to grow at a rate of 2% forever. Assuming that shareholders of Manchester plc. require a rate of return equal to 5% per year, what is the fair value for the share of Manchester plc.? O £95.52 £64.70 O £48.37 O £63.48
Q 18 Liquidators Inc. currently has a book value of equity per share equal to $10. The company is expected to have ROE of 44% and reinvest 100% of its earnings every year for the next 2 years. According to analysts' forecasts, Liquidators Inc. will be liquidated at the end of year 2 with a liquidation value equal to the book value of equity per share at the end of year 2. The required rate of return on the company's equity is equal to 20%. What is Liquidators Inc.'s intrinsic value per share equal to? Options - $14.40 $10 $6.94 $12
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Chapter 7 Homework Problems t han KE CK Enterprises has the folowing expected dividends $1 06 in one year, $1 18 in two years, and $1.31 in three years. After that, is dividends are expected to grow at 43% per year forever (so that year s dividend will be 4.3% more than $1 31 and so on) CXS eaty cost of capital is 12 2%, what is the current price of its stock?
Question 16 A stock expects to pay a dividend of $3.97 per share one year from today. After paying the dividend, the stock can be sold for $82.85 per share. If the appropriate discount rate for the stock is 16.81 percent, how much is one share of the stock worth today? a $74.33 $492.86 $70.93 None of these options are correct $23.62
Question 11 ABC company is growing at a constant rate of 8% every year. Last week the company paid a dividend of $2.8. If dividends are expected to grow at the same rate as the fi rm and the required rate of return is 12 percent, what should be the stock’s price four years from now? Show your calculation. Only typing answer Please explain step by step without table and graph thankyou

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