QUESTION 4 What is the expected annual return for a stock that is priced at $64.78, is expected to pay a dividend of $2.00 every quarter forever, and is expected to pay its next dividend in 3 months? O 12.35% (plus or minus 2 bps) 3.09% (plus or minus 2 bps) 12.93% (plus or minus 2 bps) 6.17% (plus or minus 2 bps) the answer cannot be obtained based on the given information

QUESTION 4 What is the expected annual return for a stock that is priced at $64.78, is expected to pay a dividend of $2.00 every quarter forever, and is expected to pay its next dividend in 3 months? O 12.35% (plus or minus 2 bps) 3.09% (plus or minus 2 bps) 12.93% (plus or minus 2 bps) 6.17% (plus or minus 2 bps) the answer cannot be obtained based on the given information

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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Select the best Question 24 Reddick Enterprises' stock currently sells for $35.50 per share. The dividend is projected to increase at a constant rate of 5.50% per year. The required rate of return on the stock (I/Yr) is 9.00%. What is the stock's expected dividend in 3 years (Div3)? O 146 O 224 O 1.76 O 2.00 O 1.24
2
QUESTION 1 Stock in CDB Industries has a beta of 1.12. The market risk premium is 7.2 fercent, and T-bills are currently yielding 4.2 percent. CDB's most recent dividend was $3.60 per share, and dividends are expected to grow at a 5.2 percent annual rate indefinitely. Required: If the stock sells for $58 per share, what is your best estimate of CDB's cost of equity? (Do not include the percent sign (%). Round your answer to 2 decimal places (e.g., 32.16).) cost of equity: %
A3
ets and OCK Valuation 4.5 percent forever. If the stock currently sells for $43.15 per share, what is the required return? 3. Stock Values For the company in the previous problem, what is the dividend yield? What is the expected capital gains yield? LO 1
am. 119.
F2
H the expected dividend on a share of stock is $1 next year thedividends are expected to grow at a 5% rate per annum indefinitelyand ihe siock currently selling for $14.29 what is the approximateTerum required by the stockholders?a. 21% pa b. 12% pa C. 12% pa
Question 3 The firm is expected to pay a dividend of $0.50 forever starting from the fourth year. If the required return is 10 percent, what is this stock worth today? 4.13 3.76 O 3.42
Da
4. Expected dividends as a basis for stock values The following graph shows the value of a stock’s dividends over time. The stock’s current dividend is $1.00 per share, and dividends are expected to grow at a constant rate of 2.70% per year. The intrinsic value of a stock should equal the sum of the present value (PV) of all of the dividends that a stock is supposed to pay in the future, but many people find it difficult to imagine adding up an infinite number of dividends. Calculate the present value (PV) of the dividend paid today (D₀) and the discounted value of the dividends expected to be paid 10, 20, and 50 years from now (D10, D20, D50D10, D20, D50). Assume that the stock’s required return (rss) is 8.40%. Note: Carry and round the calculations to four decimal places. Time Period Dividend’s Expected Future Value Dividend’s Expected Present Value Now End of Year 10 End of Year 20 End of Year 50 Using the orange…
15 years? 2. Stock Values The next dividend pavment by Hoffman, Inc., will be $2.05 per share. The dividends are anticipated to maintain a growth rate of LO 1

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