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- Assume Evco, Inc., has a current stock price of $39 and will pay a $1.80 dividend in one year; its equity cost of capital is 13%. What price must you expect Evco stock to sell for immediately after the firm pays the dividend in one year to justify its current price? The expected price is $_______. (Round to the nearest cent.)Assume Evco, Inc. has a current stock price of $50.92 and will pay a $2.20 dividend in one year; its equity cost of capital is 18%. What price must you expect Evco stock to sell for immediately after the firm pays the dividend in one year to justify its current price? We can expect Evco stock to sell for $_____. (Round to the nearest cent.)1. An analyst estimates that a stock will pay a $1 dividend next year and that it will sell for $40 at year-end. If the required rate of return is 14%, what is the value of the stock? A. $34.60. B. $35.52. C. $35.96. Please provide an accurte answer.
- Assume Evco, Inc. has a current stock price of $48.64 and will pay a $2.25 dividend in one year; its equity cost of capital is 10%. What price must you expect Evco stock to sell for immediately after the firm pays the dividend in one year to justify its current price? We can expect Evco stock to sell for $. (Round to the nearest cent.)Assume Evco, Inc. has a current stock price of $50.86 and will pay a $2.15 dividend in one year; its equity cost of capital is 19%. What price must you expect Evco stock to sell for immediately after the firm pays the dividend in one year to justify its current price? We can expect Evco stock to sell for? (Round to the nearest cent.)Given the following information from Ivanhoe Corporation, what price would the CAPM predict that the company's stock will trade for one year from today? (Do not round intermediate calculations. Round final answer to 2 decimal places, e.g. 50.75.) Risk free rate: Market risk premium: Beta: Current stock price: Annual dividend: Price $ 2.6 % 8.2 % 0.75 $66.20 $1.79
- A stock sells for $15 per share. You purchase 100 shares for $15 a share (i.e., for $1,500), andafter a year the price rises to $18.75 a) What will be the percentage return on your investment ifyou bought the stock on margin and the margin requirement was 65 percent? (Ignore commissions, dividends, and interest expense.) b) Rather than selling for $18.75, determine the percentage return on your investment if the price of the stock falls to $12.30 Based on your answers to both questions, what generalization on the use of marginaccounts can be inferred?'S A company will pay a $2 per share dividend in 1 year. The dividend in 2 years will be $4 per share, and it is expected that dividends will grow at 5% per year thereafter. The expected rate of return on the stock is 14%. a. What is the current price of the stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Current price b. What is the expected price of the stock in a year? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Expected pricea) Suppose you look in the newspaper and see ABC trading at $50 per share. Calls on ABC with one month to expiration and an exercise price of $45 are trading at $6.50 each. Puts on ABC with one month to expiration and an exercise price of $55 are trading at $3.50 each. Are these prices reasonable? Explain. b) Sarwar Company stock has a current market price of $47.60 per share. The one-year call on this stock with a strike price of $45 is priced at $3.20 while the one-year put with a strike price of $45 is priced at $.15. What is the risk-free rate of return?
- A stock is selling today for $50 per share. At the end of the year, it pays a dividend of $3 per share and sells for $56. Required: a. What is the total rate of return on the stock? b. What are the dividend yield and percentage capital gain? c. Now suppose the year-end stock price after the dividend is paid is $48. What are the dividend yield and percentage capital gain in this case? A Required What is the total rate of return for the stock? B Required What is the dividend yield and percentage capital gain? C Required Now suppose the year-end stock price after the dividend is paid is $48. What are the dividend yield and percentage capital gain in this case? (Negative amounts should be indicated by a minus sign. Enter your answers as a whole percent.)Assume that American Eagle Outfitters (AEO) will pay $0.18/share dividend next year. The dividend is expected to grow at a 15.5 percent rate. At the current stock price of $13.72/share, what is the return shareholders are expecting? Group of answer choices 16.81% 15.50% 17.08 % 17.32% None of these are correct12)Under dollar-cost averaging (cedi cost averaging), an investor will purchase GHS6,000 worth of stock each year for three years. The stock price is GHS40 in year 1, GHS30 in year 2, and GHS48 in year 3. i)Compute the average price per share. ii) Compute the average cost per share. Explain why the average cost is less than the average price