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Calculate the value of a stock that is expected to pay a constant dividend of $1.05
per year if the required return is 11%.
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- Many retirement funds charge an administrative fee equal to 0.25% on managed assets. Suppose that Alexx and Spenser each invest $4,000 in the same stock this year. Alexx invests directly and earns 4% a year. Spenser uses a retirement fund and eams 3.75%. If Alexx and Spenser leave their investments in place for 30 years, with annual compounding of the interest, how much more will Alexx have than Spenser at the end of the 30-year period? Alexx will have more than Spenser after 30 years. (Enter your response rounded to two decimal places.)How long does it take for your money to double if you can earn 7% on your investment? Triple? Quadruple?Assume you have $12,000 in cash. You can deposit it today in a mutual fund earning 8.2% semiannually, or you can wait, enjoy some of it, and invest $11,000 in your brother's business in two years. Your brother is promising you a return of at least 10% on your investment. Regardless of the investment option you choose, you will have to cash in at the end of 10 years. Assume your brother is trustworthy and that both investments carry the same risk. Which investment option will you choose and why?
- An investment will pay $100 at the end of each of the next 3 years, $300 at the end of year 4, $500 at the end of Year 5, and $300 at the end of Year 6. If other investments of equal risk earn 8% annually, what is this investment's present value? 923.98 976.31 1013.78 1007.56Suppose you are willing to pay $30 today for a share of stock which you expect to sell at the end of one year for $32. If you require an annual rate of return of 12 percent, what must be the amount of the annual dividend which you expect to receive at the end of year 1? Select the closest answer.Michael has been dollar cost averaging in a mutual fund by investing $2,000 at the beginning of every quarter for the past 7 years. He earns an average annual compound return of 11% on this investment, compounded quarterly. How much is the fund worth today?a. $82,721.95.b. $84,996.80.c. $91,389.22.d. $93,902.42.