Question 9 TEME is a manufacturer of toy construction equipment. If it pays out all of its earnings as dividends, it will have earnings of 0.3 million per quarter in perpetuity. Suppose that the discount rate, expressed as an effective annual rate (EAR), is 16%. TEME pays dividends quarterly. What is the value of TEME if it continues to pay out all of its earnings as dividends? Assume that the next dividend is paid one quarter from now. *Make sure to input the answer without any currency symbols, commas, and remove M as Million value. e.g. 6,000,000 = 6M, so the answer should be written as 6 1.875, 1, 2, 1.88 are all wrong awnsers
Question 9 TEME is a manufacturer of toy construction equipment. If it pays out all of its earnings as dividends, it will have earnings of 0.3 million per quarter in perpetuity. Suppose that the discount rate, expressed as an effective annual rate (EAR), is 16%. TEME pays dividends quarterly. What is the value of TEME if it continues to pay out all of its earnings as dividends? Assume that the next dividend is paid one quarter from now. *Make sure to input the answer without any currency symbols, commas, and remove M as Million value. e.g. 6,000,000 = 6M, so the answer should be written as 6 1.875, 1, 2, 1.88 are all wrong awnsers
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 9
TEME is a manufacturer of toy construction equipment. If it pays out all of its earnings as dividends, it will have earnings of 0.3 million per quarter in perpetuity. Suppose that the discount rate, expressed as an effective annual rate (EAR), is 16%. TEME pays dividends quarterly.
What is the value of TEME if it continues to pay out all of its earnings as dividends? Assume that the next dividend is paid one quarter from now.
*Make sure to input the answer without any currency symbols, commas, and remove M as Million value.
e.g. 6,000,000 = 6M, so the answer should be written as 6
1.875, 1, 2, 1.88 are all wrong awnsers
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