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- (This question has three parts.) Von Bora Corporation is expected pay a dividend of $1.97 per share at the end of this year and a $2.35 per share at the end of the second year. Immediately after Von Bora pays the $2.35 per share dividend at the end of the second year, you expect Von Bora's stock price to be $22.00 per share. Von Bora's cost of equity capital is 12.0% (...) Question A: What is the highest price that you would be willing to pay today for a share of Von Bora stock if you plan to hold the stock for two years? Sper share (round to two decimal places) Question B: What is the highest price that you would be willing to pay today for a share of Von Bora stock if you plan to hold the stock for five years? Sper share (round to two decimal places) Question C: > At the end of the second year (e.g., at time t=2), immediately before Von Bora pays the $2.35 per share dividend, at what price would you expect shares of Von Bora's stock to be selling? Sper share (round to two decimal…(This question has three parts.) Von Bora Corporation is expected pay a dividend of $1.99 per share at the end of this year and a $2.37 per share at the end of the second year. Immediately after Von Bora pays the $2.37 per share dividend at the end of the second year, you expect Von Bora's stock price to be $22.00 per share. Von Bora's cost of equity capital is 11.0%. Question A: What is the highest price that you would be willing to pay today for a share of Von Bora stock if you plan to hold the stock for two years? $4 per share (round to two decimal places) Question B: What is the highest price that you would be willing to pay today for a share of Von Bora stock if you plan to hold the stock for five years? 2$ per share (round to two decimal places) At the end of the second year (e.g., at time t=2), immediately before Von Bora pays the $2.37 per share dividend, at what price would you expect shares of Von Bora's stock to be selling? Question C: $ per share (round to two decimal…Use the information for the question(s) below. Von Bora Corporation is expected to pay a dividend of $1.40 per share at the end of this year and a $1.50 per share at the end of the second year. You expect Von Bora's stock price to be $25.00 at the end of two years. Von Bora's equity cost of capital is 10%. Suppose you plan on purchasing Von Bora stock in one year, right after the $1.40 dividend is paid. You then plan on selling your stock at the end of year two, right after the $1.50 dividend is paid. The total return that you will receive on your investment is closest to: OA. 10.00%. B. 10.25%. C. 9.50%. D. 10.75%.
- Anle Corporation has a current stock price of $20 and is expected to pay a dividendof $1 in one year. Its expected stock price right after paying that dividend is $22.b. How much of Anle’s equity cost of capital is expected to be satisfied by dividendyield and how much by capital gain?A Corporation will pay a dividend of $1.75 per share at this year's end and a dividend of $2.25 per share at the end of next year. It is expected that the price of its stock will be $42 per share after two years. If the firm has an equity cost of capital of 9%, what is the maximum price that a prudent investor would be willing to pay for a share of the stock today? Do not include a dollar sign.Suppose Acap Corporation will pay a dividend of $2.89 per share at the end of this year and $2.93 per share next year. You expect Acap's stock price to be $52.48 in two years. Assume that Acap's equity cost of capital is 11.3%. a. What price would you be willing to pay for a share of Acap stock today, if you planned to hold the stock for two years? b. Suppose instead you plan to hold the stock for one year. For what price would you expect to be able to sell a share of Acap stock in one year? c. Given your answer in (b), what price would you be willing to pay for a share of Acap stock today if you planned to hold the stock for one year? How does this compare to your answer in (a)?
- Valiant Corp. pays a dividend of $2.5 per share and is expected to pay this amount indefinitely. If the corporation's equity cost of capital is 11%, its stock price should be $_____. (round your answer to two decimal places)Anle Corporation has a current stock price of $20 and is expected to pay a dividendof $1 in one year. Its expected stock price right after paying that dividend is $22.a. What is Anle’s equity cost of capital?b. How much of Anle’s equity cost of capital is expected to be satisfied by dividendyield and how much by capital gain?XYZ Motor Corp. is all equity financed and generates perpetual annual EBIT of $300. Assume that the EBIT, and all other cash flows, occur at year end and that we are currently at the beginning of a year. Assume that XYZ has a 100% payout rate, 1,500 shares outstanding, and that shareholders require a return of 5%. Assume that the tax rate is 0%. XYZ Motor Corp. is considering an open market stock repurchase. It plans to buy 20% of its outstanding shares at the price of $4.00 per share. The repurchased shares will be cancelled. It will finance the repurchase by issuing perpetual bonds with a coupon rate (and yield) of 3%. Assume that the tax rate is 0%. If XYZ Motor Corp. goes ahead with the repurchase, then what is the stock price after the repurchase is complete?
- Suppose Acap Corporation will pay a dividend of $2.75 per share at the end of this year and $2.95 per share next year. You expect Acap's stock price to be $51.61 in two years. Assume that Acap's equity cost of capital is 11.8%. a. What price would you be willing to pay for a share of Acap stock today, if you planned to hold the stock for two years? b. Suppose instead you plan to hold the stock for one year. For what price would you expect to be able to sell a share of Acap stock in one year? c. Given your answer in (b), what price would you be willing to pay for a share of Acap stock today if you planned to hold the stock for one year? How does this compare to your answer in (a)? a. What price would you be willing to pay for a share of Acap stock today, if you planned to hold the stock for two years? If you plan to hold the stock for two years, the price you would pay for a share of Acap stock today is $_____ (Round to the nearest cent.) Part 2 b. Suppose instead you plan to hold…Suppose Acap Corporation will pay a dividend of $2.84 per share at the end of this year and $2.94 per share next year. You expect Acap's stock price to be $50.02 in two years. Assume that Acap's equity cost of capital is 9.1%. a. What price would you be willing to pay for a share of Acap stock today, if you planned to hold the stock for two years? b. Suppose instead you plan to hold the stock for one year. For what price would you expect to be able to sell a share of Acap stock in one year? c. Given your answer in (b), what price would you be willing to pay for a share of Acap stock today if you planned to hold the stock for one year? How does this compare to your answer in (a)? a. What price would you be willing to pay for a share of Acap stock today, if you planned to hold the stock for two years? If you plan to hold the stock for two years, the price you would pay for a share of Acap stock today is $______ (Round to the nearest cent.) b. Suppose instead you plan to hold the stock…Suppose Acap Corporation will pay a dividend of $2.83 per share at the end of this year and $3.07 per share next year. You expect Acap's stock price to be $52.34 in two years. Assume that Acap's equity cost of capital is 10.7%. a. What price would you be willing to pay for a share of Acap stock today if you planned to hold the stock for two years? b. Suppose, instead, you plan to hold the stock for one year. For what price would you expect to be able to sell a share of Acap stock in one year? c. Given your answer in part b, what price would you be willing to pay for a share of Acap stock today if you planned to hold the stock for one year? How does this price compare to your answer in part a? a. If you planned to hold the stock for two years, the price you would pay for a share of Acap stock today is $ (Round to the nearest cent.)
