You own a large piece of land which you are using for setting up a manufacturing unit. In this case; O a. You have incurred an opportunity cost in relation to the land O b. You have incurred a sunk cost in relation to the land ○ c. You have incurred a capital cost in relation to the land ○ d. You have incurred no cost in relation to the land O e. You have incurred a short-term cost in relation to the land Suppose that your company is expected to pay a dividend of $1.50 per share next year. The growth in dividend has been steady at 5.1% p.a. and the market expects this growth to continue. If the share is priced at $25 per share, is a 4% cost of equity tenable? O a. No O b. Yes When you buy common shares; ○ a. you cannot sell your shares to a third party. O b. You become a part owner of the company ○ c. You receive interest on your investment O d. You become a company's debtor ○ e. You become the company's creditor If you purchase a 10% p.a. 3-year coupon bond today and hold it till the maturity date, it gives you a compounded return of 15%. How much will you need to pay today to buy one such bond? ○ a. a premium price O b. $1,124.34 approximately ○ c. $885.84 approximately O d. $1,000 O e. Cannot answer with the given information
You own a large piece of land which you are using for setting up a manufacturing unit. In this case; O a. You have incurred an opportunity cost in relation to the land O b. You have incurred a sunk cost in relation to the land ○ c. You have incurred a capital cost in relation to the land ○ d. You have incurred no cost in relation to the land O e. You have incurred a short-term cost in relation to the land Suppose that your company is expected to pay a dividend of $1.50 per share next year. The growth in dividend has been steady at 5.1% p.a. and the market expects this growth to continue. If the share is priced at $25 per share, is a 4% cost of equity tenable? O a. No O b. Yes When you buy common shares; ○ a. you cannot sell your shares to a third party. O b. You become a part owner of the company ○ c. You receive interest on your investment O d. You become a company's debtor ○ e. You become the company's creditor If you purchase a 10% p.a. 3-year coupon bond today and hold it till the maturity date, it gives you a compounded return of 15%. How much will you need to pay today to buy one such bond? ○ a. a premium price O b. $1,124.34 approximately ○ c. $885.84 approximately O d. $1,000 O e. Cannot answer with 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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Can you please answer?
Transcribed Image Text:You own a large piece of land which you are using for setting up a manufacturing unit. In this
case;
O a. You have incurred an opportunity cost in relation to the land
O b. You have incurred a sunk cost in relation to the land
○ c. You have incurred a capital cost in relation to the land
○ d. You have incurred no cost in relation to the land
O e. You have incurred a short-term cost in relation to the land
Suppose that your company is expected to pay a dividend of $1.50 per share next year. The
growth in dividend has been steady at 5.1% p.a. and the market expects this growth to
continue. If the share is priced at $25 per share, is a 4% cost of equity tenable?
O a. No
O b. Yes
Transcribed Image Text:When you buy common shares;
○ a. you cannot sell your shares to a third party.
O b. You become a part owner of the company
○ c. You receive interest on your investment
O d. You become a company's debtor
○ e. You become the company's creditor
If you purchase a 10% p.a. 3-year coupon bond today and hold it till the maturity date, it
gives you a compounded return of 15%. How much will you need to pay today to buy one
such bond?
○ a. a premium price
O b. $1,124.34 approximately
○ c. $885.84 approximately
O d. $1,000
O e. Cannot answer with the given information
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