Investments, 11th Edition (exclude Access Card)
Investments, 11th Edition (exclude Access Card)
11th Edition
ISBN: 9781260201543
Author: Zvi Bodie Professor; Alex Kane; Alan J. Marcus Professor
Publisher: McGraw-Hill Education
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Chapter 12, Problem 19PS
Summary Introduction

To determine: A technical analyst needed for the market index

Introduction: Technical Analysis helps both the trader and the investor to analyze the stocks with the help of price and the volume, rather than the revenue.

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(Do not use Excel) I like to see the work of how to solve the problem. The investment banking firm of Doots Incorporated. will use a dividend valuation model to appraise the shares of the Straight Fence Corporation. Dividends (D1) at the end of the current year will be $2.70. The growth rate (g) is 7 percent and the discount rate (Ke) is 13 percent.  a. What should be the price of the stock to the public?  b. If there is a 8 percent total underwriting spread on the stock, how much will the issuing corporation receive?  c. If the issuing corporation requires a net price of $38.30 (proceeds to the corporation) and there is a 7 percent underwriting spread, what should be the price of the stock to the public? (Round to two places to the right of the decimal point.)
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