2 A firm is planning to pay a dividend of $1.50 in a year. The growth rate of dividend is expected to be 4%a year and the required rate of retum is 99%. What is the value of this stock? Round to the nearest cent. Donot include the dollar sign in your answer. (i.e. If your answer were $123, then type 1.23 without a $ sign)

2 A firm is planning to pay a dividend of $1.50 in a year. The growth rate of dividend is expected to be 4% a year and the required rate of return is 99%. What is the value of this stock? Round to the nearest cent. Do not include the dollar sign in your answer. (i.e. If your answer were $1.23, then type 1.23 without a $ sign)

2 A firm is planning to pay a dividend of $1.50 in a year. The growth rate of dividend is expected to be 4% a year and the required rate of return is 99%. What is the value of this stock? Round to the nearest cent. Do not include the dollar sign in your answer. (i.e. If your answer were $1.23, then type 1.23 without a $ sign)

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter17: Financial Markets

Section: Chapter Questions

Problem 4SCQ: Which has a higher average return over time: stocks, bands, or a savings account? Explain your...

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1 Jim owns shares of Abco, Inc. preferred stock which he says provides him with a constant 6.58 percent rate of return. The stock is currently priced at $45.60 a share. What is the amount of the dividend per share? Round to the nearest cent. Do not include the dollar sign in your answer. (i.e. If your answer were $123, then type 1.23 without a S sign)
What will be the total investment cost of shares? Show appropriate calculations.
Which has a higher average return over time: stocks, bands, or a savings account? Explain your answer.
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What is the process of Calculating the Return on Invested Capitalfor Mixed Investments?
1) Suppose you buy one share of stock for $50 and sell it for $100. Your profit is $50. If that happens within a year, your rate of return is an impressive 100%! If it takes six years, what would be the average annual rate of return on your investment?
What is the rate of return when 12 shares of Stock A, purchased for $22/share, are sold for $465? The commission on the sale is $9. 4 F4 Copyright © 2003-2022 International Academy of Science. All Rights Reserved. F5 Rate of Return Enter the appropriate value into the formula to calculate the rate of return. A F6 5 RTY 6 & Total Cost = $273 Profit= $192 [?] Rate of Return = F7 7 * = F8 8 profit or loss total cost DELL F9 9. prtsc F10 home F11 Enter end F12 +11. Insert
Suppose you expect a stock to pay a dividend of $10 every year forever and the discount rate is fixed at 5%. (a) What would you expect the price of the stock to be if it were priced according to its present value? (b) What happens to the price of the stock if the discount rate falls to 2%? (c) Now suppose you expect the dividend to grow by 1.5% every year, such that it will be $10.15 next vear. $10.30 the year after that, and so on. What are the new prices of the stock with 5% and 2% discount rates?