Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Castles in the Sand generates a ROE of 25.0 percent and maintains a payout ratio of 0.6 . Its earnings this coming year will be $ 4.05 per share. Investors expect a return of 14.42 percent on the stock. What is the stocks P/E ratio?
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- A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is rs = 10.5%, and the expected constant growth rate is g = 6.4%. What is the stock's current price? a. $17.39 b. $17.84 c. $18.29 d. $18.75 e. $19.22arrow_forwardA share of stock with a beta of 1.20 now sells for 55. Investors expect the stock to pay a year-end dividend of 2.90. The T-bill rate is 7 percent, and the market risk premium is 8 percent. If the stock is perceived to be fairly priced today,What must be investors’ expectations of the price of the stock at the end of the year?arrow_forwardThe risk-free rate of return is 5%, the required rate of return on the market is 10%, and High-Flyer stock has a beta coefficient of 1.8. If the dividend per share expected during the coming year, D1, is $3.60 and g = 5%, at what price should a share sell? (Do not round intermediate calculations. Round your answer to 2 decimal places.)arrow_forward
- A share of common stock is expected to pay a dividend of 2.50 at the end of the year. if the expected long-run growth rate for this stock is 6%, and if investors require a(n) 17% rate of return, what is the current price of the stock? A stock is expected to pay a dividend of $1 at the end of the year. The required rate of return is rs = 17%, and the expected constant growth rate is g =4%. What is the stock's current price? Brown Enterprises' bonds currently sell for $1,025. They have a 9-year maturity, an annual coupon of $100, and a par value of $1,000. The current yield of the bond isarrow_forwardYou are considering an investment in the common stock of Remi's Sporting Goods. The stock is expected to pay a dividend of $1.80 a share at the end of the year (D1=1.80). The stock has a beta of 0.8. The risk-free rate is 4.5%, and the market expected return is 8.0%. The stock's dividend is expected to grow at some constant rate g. The stock currently sells for $24 a share. Assuming the market is in equilibrium, what does the market believe will be the stock price at the end of 4 years?arrow_forwardVisa, Inc. (V) has a beta of 1.08, is selling for $56.72, and will pay a $2.35 dividend at the end of the year. If the stock is priced at $57.15 at year-end, it is __________, so __________ it. Assume the risk-free rate is 3.05%, and the expected market return is 3.92%. A. underpriced / sell B. underpriced / buy C. overpriced / sell D. fair-valued / holdarrow_forward
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