The price of a stock is $55 at the beginning of the year and $50 at the end of the year. If the stock paid a $3 dividend and inflation was 3%, w real holding-period return for the year? Multiple Choice о -3.64% -6.36% -6.44% -11.74%

The price of a stock is $55 at the beginning of the year and $50 at the end of the year. If the stock paid a $3 dividend and inflation was 3%, w real holding-period return for the year? Multiple Choice о -3.64% -6.36% -6.44% -11.74%

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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You purchased a stock at a price of $56.04. The stock paid a dividend of $2.31 per share and the stock price at the end of the year is $62.59. What is the capital gains yield? Multiple Choice 10.46% 15.81% 9.94% 4.12% 11.69%
Preferred Stock Rate of Return Nick's Enchiladas has preferred stock outstanding that pays a dividend of $3 at the end of each year. The preferred sells for $60 a share. What is the stock's required rate of return (assume the market is in equilibrium with the required return equal to the expected return)? Round the answer to two decimal places. %
Use the following tables to assess the worthiness of Verticon stock as an investment. Verticon Stock Data (Current and Historical) 3:45PM EDT Aug 16, 2011 Price 18.85 USD Change +0.64 (+3.51%) Mkt cap 147.1B Div/yield 0.20/4.24 Shares 8,012 Beta 0.70 Book/share 11.335 EPS 1.11 12/2010 12/2009 12/2008 (Millions of Dollars) Total Assets 195,014 195,949 111,148 Total Liabilities 107,201 122,935 53,592 Preferred Shareholders’ Equity 52 61 73 Common Shareholders’ Equity 87,761 72,953 57,483 Shares Outstanding 8,012 8,070 6746 Book/Share ? 9.040 8.521 Q1 (Mar ’11) 2010 Net profit margin 15.24% 12.24% Return on equity 11.60% 9.30% Which one in bold? One of the most important features of a stock is its book value. The book value per share of Verticon’s stock for the year 2010 was equal to (10.954, 13.693, 11.502). Looking at the (Market cap, EPS, change in price, beta value, ROE) ,…
Share commom stock dividend is $1.00 , g=5.4 and required return is 11.4%, What is the stock price?
10-7 What is the geometric average return of a stock with the following share price history? Year Share price 1 $20 2 $22 3 $24 4 $26 5 $28 Select one: a. 9.09% b. 8.78% c. 8.33% d. 7.69% e. 6.48%
You buy a share on 1 January for $35.18 and sell it on 31 December for $41.38. During the year you receive $2.30 in dividends from the share. What is your capital gain yield? a. -14.98% b. 14.98% c. 17.62% d. -17.62%
Carter's preferred stock pays a dividend of $1.15 per quarter. If the price of the stock is $62.50, what is its nominal (not effective) annual rate of return? a. 1.84% b. 3.68% c. 7.57% d. 3.71% e. 7.36%
A company has earnings per share of $3.75 and P/E of 47. What is the stock price? Question 12 options: $174.08 $176.25 $185.95 $112.98
A perpetual preferred stock pays a $1.65 annual dividend and has a required return of 5.81%. The value is closest to A. $28.40. B. $31.33. C. $33.79. D. $36.55.
Projections for a firm whose stock you wish to value: Years 1-6 EPS Payout Ratio Stock's beta is YTM on T-bond is Stock premium is 1.26 0.27 1. What is the stock's value? A Between 15.00 and 23.00 B Between 23.00 and 27.00 C Between 27.00 and 31.00 D Between 31.00 and 40.00 0.6 4.3% 5.0% Years 7-13 4.97 0.36 Discount the projected dividends at the required rate of return to estimate the stock's value. Only use years 1-24 in your computations. Years 14 - 24 6.91 0.42 2. Please go back to the original story. Suppose the stock becomes less risky from an investor's view. For instance, suppose its beta is now 0.80 If there are 90,000,000 shares outstanding, what is the impact on the market value of the firm? Hint: first find the new stock price, then compute how it changed, and multiply that change by the number of shares outstanding. A up between 0 and 160,000,000 B up between 160,000,000 and 500,000,000 C down between 0 and 160,000,000 D down between 160,000,000 and 500,000,000
Historical Realized Rates of Return Stocks A and B have the following historical returns: Year 2012 -15.10% -14.90% 2013 21.50 27.00 2014 12.50 31.60 2015 -4.00 -6.10 2016 29.25 6.55 Calculate the average rate of return for each stock during the 5-year period. Round your answers to two decimal places. Stock A % Stock B % Assume that someone held a portfolio consisting of 50% of Stock A and 50% of Stock B. What would have been the realized rate of return on the portfolio in each year? What would have been the average return on the portfolio during this period? Round your answers to two decimal places. Year Portfolio 2012 % 2013 % 2014 % 2015 % 2016 % Average return % Calculate the standard deviation of returns for each stock and for the portfolio. Round your answers to two decimal places. rA rB Portfolio Std. Dev. % % % If you are a risk-averse investor then, assuming these are your only choices, would you prefer…
Calcualte the Cost of Preferred Stock: Par value = $100 Annual dividend = 7.5% of par Market value = $102 Flotation cost = 4%

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