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Taaktha, Mony, & Runne, symbol TMR, is selling for $1.32. The company has been losing money for many years and has never paid a dividend. However, the analysts on Yahoo Finance say it will be worth $3.25 next year. We will use their estimate but change the time frame to four years. If our required rate of return is 15%, would this be a potentially good investment for us? What can we say about the potential risk involved with a stock such as this?

Taaktha, Mony, & Runne, symbol TMR, is selling for $1.32. The company has been losing money for many years and has never paid a dividend. However, the analysts on Yahoo Finance say it will be worth $3.25 next year. We will use their estimate but change the time frame to four years. If our required rate of return is 15%, would this be a potentially good investment for us? What can we say about the potential risk involved with a stock such as this?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Business 123 Introduction to Investments

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Taaktha, Mony, & Runne, symbol TMR, is selling for $1.32. The company has been losing money for many years and has never paid a dividend. However, the analysts on Yahoo Finance say it will be worth $3.25 next year. We will use their estimate but change the time frame to four years. If our required rate of return is 15%, would this be a potentially good investment for us? What can we say about the potential risk involved with a stock such as this?
Transcribed Image Text:Taaktha, Mony, & Runne, symbol TMR, is selling for $1.32. The company has been losing money for many years and has never paid a dividend. However, the analysts on Yahoo Finance say it will be worth $3.25 next year. We will use their estimate but change the time frame to four years. If our required rate of return is 15%, would this be a potentially good investment for us? What can we say about the potential risk involved with a stock such as this?
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