Pharsalus Inc. just paid a dividend (i.e., DO) of $ 1.36 per share. This dividend is expected to grow at a rate of 2.5 percent per year forever. The appropriate discount rate for Pharsalus's stock is 10.6 percent. What is the price of the stock? (Round your answer to 2 decimal places and record your answer without dollar sign or commas).
Q: A bond with a coupon rate of 11 percent sells at a yield to maturity of 13 percent. If the bond…
A: Here,Time to Maturity is 15 YearsCoupon Rate is 11%Yield to Maturity is 13%
Q: Raghubhai
A: The objective of this question is to determine the price at which a margin call will be received. A…
Q: rates. Finally calculate the spot rates combining both the Expectations Theory with the liquidity…
A: Forward rate: Forward rate indicates forecasted interest ratesSpot rate: Spot rate indicates exact…
Q: Assume Nathalie dies today. Based on their current situation, what asset would be subject to probate…
A: The objective of the question is to identify which of Nathalie's assets would be subject to probate…
Q: For the following cash flow, calculate the equivalent PW. Assume i % 8% per year. Cash Inflow, $…
A: Equivalent PW stands for Equivalent Present Worth which is used to compare different investment…
Q: None
A: The objective of the question is to calculate the potential savings for September given the actual…
Q: Which of the following statements is CORRECT? a. If a stock has a required rate of return rs = 12%…
A: The objective of the question is to identify the correct statement among the given options related…
Q: a. Calculate the equity value of your margin account on each settlement date, including any…
A: The future contract is similar to a promise to purchase or sell an item at a specific price at a…
Q: Outdoor Sports is considering adding a putt putt golf course to its facility. The course would cost…
A: In this scenario, Outdoor Sports is considering adding a putt putt golf course to its facility. To…
Q: You run a construction firm. You have just won a contract to build a government office complex.…
A: The NPV of an investment or project is a financial statistic used to analyze its profitability. It…
Q: Scenario Recession Normal economy Boom Rate of Return Probability Stocks Bonds 0.20 -3% 18% 0.60 19%…
A: A statistical tool used to quantify the degree of variation or dispersion in a set of values is the…
Q: Rare Agri-Products Ltd. is considering a new project with a projected life of seven (7)…
A: Variables in the question:Initial equipment (IE) cost=$41,000,000One-time rebate on any initial…
Q: When preparing financial projections for a business plan, be Oneutral O bullish aggressive in your…
A: Financial projection for a business plan is important for providing a roadmap to a certain business…
Q: Dickinson Company has $11,820,000 million in assets. Currently half of these assets are financed…
A:
Q: Blossom Company is considering a long-term investment project called ZIP. ZIP will require an…
A: Annual Rate of Return refers to the actual rate of return earned in the year from the investment…
Q: Problem 8-10 You are building a free cash flow to the firm model. You expect sales to grow from $1.2…
A:
Q: Suppose you start saving today for a $30,000 down payment that you plan to make on a house in 7…
A: Down payment = $30,000Number of years = 7APR = 8%To find: Amount of deposit made in the account…
Q: Here are the returns on two stocks. Digital Executive Cheese Fruit January +13 +6 February -2 +1…
A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts…
Q: Builtrite needs to raise $2,000,000 for a plant improvement. It plans to sell $1000 par value bonds…
A: The value of a bond can be obtained by adding the present value of the bond's cash flows such as…
Q: POD has a project with the following cash flows. The discount rate for the project is 9.1 percent.…
A: Net Present Value (NPV) is a calculation used to assess the worthiness of an investment by comparing…
Q: Red Sun Rising Corporation has just signed a lease for its new manufacturing facility. The lease…
A: Given Data: Particulars ValueAnnual Lease Rental1850000Lease Period (Years)20Interest Rate0.0355
Q: What is the coupon rate of a ten-year, $5,000 bond with semiannual coupons and a price of $4,047.28,…
A: Compound = Semiannually = 2Time = t = 10 * 2 = 20Face Value = fv = $5000Current Price of Bond = pv =…
Q: How much must be deposited today into the following account in order to have a $115,000 college fund…
A: Here,Required Amount (FV) is $115,000Time Period (n) is 15 yearsInterest Rate (r) is…
Q: Tanaka Machine Shop is considering a four-year project to improve its production efficiency. Buying…
A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…
Q: All else equal, the expected return will be lowest for which of the following bonds? Selected…
A: A bond is issued by the issuer and purchased by the bondholders. A bond is issued by a firm (issuer)…
Q: Using Technological Tools: Present Value of an Annuity - Knowledge Check Knowledge Check You need…
A: Annual cash flow (PMT) is $5,000.The period (N) is 4 years.interest rate (I) is 8%.
Q: Jaguar Holdings Company must choose between solar and an electric-powered forklift truck for moving…
A: Jaguar Holdings Company is faced with a decision: a solar-powered forklift or an electric-powered…
Q: The company falls in the 25% tax category for ordinary income and 40% tax category for capital…
A: Discount rate:In this scenario, the discount rate serves as the benchmark rate used to determine…
Q: Your company has been approached to bid on a contract to sell 19,000 voice recognition (VR) computer…
A: The objective of this question is to determine the bid price for the contract that would result in a…
Q: Assume Nathalie dies today. Based on their current situation, what asset would be subject to probate…
A: The objective of the question is to identify which of Nathalie's assets would be subject to probate…
Q: Equal end of year payments of $263.80 each are being made on a $1,000 loan at 15% per year…
A: Given:Yearly payments (PMT) = $263.80Loan amount (PV) = $1000Number of payments = ?Interest rate (i)…
Q: You won $100 000. 00 in a lottery and you want to set some of that sum aside for10 years. After 10…
A: Time, value of money refers to the concept used for calculating the current value of an asset that…
Q: Bilboa Freightlines, S.A., of Panama, has a small truck that it uses for intracity deliveries. The…
A: The key information obtained from the question can be summarised as follows:To compute The Net…
Q: the following information is provided for the stock market: Expected Beta Return Alphabet 12.5% 1.5…
A: Using the Capital Asset Pricing Model (CAPM) and assuming a risk-free rate of 0%, Yahoo's expected…
Q: a. Bought a delivery truck and agreed to pay $61,000 at the end of three years. b. Rented an office…
A: Present value:Thee value of future cashflow in the present is known as present value. The present…
Q: Payback Period Each of the following scenarios is independent. Assume that all cash flows are…
A: Payback period-It represents the time period required for recovery of the initial investment in the…
Q: Purple Whale Foodstuffs Inc. is evaluating a proposed capital budgeting project (project Sigma) that…
A: The objective of the question is to calculate the Internal Rate of Return (IRR) for a proposed…
Q: Suppose Wacken, Limited just issued a dividend of $2.61 per share on its common stock. The company…
A: The cost of equity is the expense associated with the stake of equity shareholders in the company.…
Q: Jacob is a member of WCC (an LLC taxed as a partnership). Jacob was allocated $75,000 of business…
A: Part-a) $ 30010Part-b) $ 24460 Explanation:Step 1: Part-a AmountExplanation1) Business income…
Q: Find the present value of the following ordinary annuity. Periodic Payment Payment Interval Term…
A: The objective of this question is to calculate the present value of an ordinary annuity. An ordinary…
Q: Short shorter maturity bonds and long longer maturity bonds. Short long maturity bonds and long…
A: Flattenning yield curve:A flattening yield curve describes a scenario in the financial markets…
Q: A company is considering investing in new machinery. The machinery will cost $1,500,000 and will be…
A: Internal rate of return:The internal rate of return (IRR) in this scenario represents the discount…
Q: Each of the following factors affects the weighted average cost of capital (WACC) equation. Which of…
A: 1. Factors Outside a Firm's Control:These are elements that a firm cannot directly influence. They…
Q: Yosemite Corporation has an outstanding debt of $10.05 million on which it pays a 7 percent fixed…
A: In a swap, there are two counterparties, one of the counterparties pays either fix/floating rate and…
Q: Robert Williams owns a garage and is contemplating purchasing a tire retreading machine for $11,820.…
A: Present Value of annuity refers to the current value of a series of equal cash flows or payments at…
Q: We want to construct an asset portfolio by purchasing bond A, B, and C in a way that the values,…
A: In order to create an immunized asset portfolio, the durations and convexity of the liabilities must…
Q: You have been given the following return information for a mutual fund, the market index, and the…
A: The Treynor ratio is identified using two variables namely the excess returns and the beta value.…
Q: An Australia basedAn Australia based company takes a US$1 million £ variable rate loan in the United…
A: The Australian business incurs many risks when it takes out a US$1 million variable rate loan in the…
Q: A 14-year bond pays semi-annual coupons at j2 = 9% and has a yield rate of j2 = 7.1%. If the book…
A: The price of bond is the present value of coupon payments based on the face value and present value…
Q: Duo Corporation is evaluating a project with the following cash flows: Year 1 022345 Cash Flow -$…
A: MIRR- This is a modification of IRR. It is based on the assumption that positive cash flows are…
Step by step
Solved in 2 steps
- A stock is bought for $23.25 and sold for $28.69 a year later, immediately after it has paid a dividend of $4.18. What is the capital gain rate for this transaction? NOTE: Enter the PERCENTAGE number rounding to two decimals. If your decimal answer is 0.034576, your answer must be 3.46. DO NOT USE the % sign. A stock is bought for $29.45 and sold for $35.96 a year later, immediately after it has paid a dividend of $3.97. What is the dividend yield for this transaction? NOTE: Enter the PERCENTAGE number rounding to two decimals. If your decimal answer is 0.034576, your answer must be 3.46. DO NOT USE the % sign. You own a portfolio that has $3,764 invested in Stock A and $7,514 invested in Stock B. If the expected returns on these stocks are 9.33% and 11.67%, respectively, what is the expected return on the portfolio? NOTE: Enter the PERCENTAGE number rounding to two decimals. If your decimal answer is 0.034576, your answer must be 3.46. DO NOT USE the % sign.At the beginning of the year, you purchased a share of stock for $51.64. Over the year the dividends paid on the stock were $3.26 per share. Calculate the return if the price of the stock at the end of the year is $50.24. (Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places. (e.g., 32.16))The Stopperside Wardrobe Co. Just paid a dividend of $1.69 per share on Its stock. The dividends are expected to grow at a constant rate of 7.2% per year indefinitely. If Investors require an 12.2% return on The Stopperside Wardrobe Co. stock, answer the following: (Do not round Intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.) What is the current price? Current price $ What will the price be in three years? Stock price in three years What will the price be in 15 years? Stock price in 15 years $
- Stimpson Inc. preferred stock pays a $.50 annual dividend. What is the value of the stock if your required rate of return is .10? Instruction: Type your answer in dollars, and round to two decimal placesGentleman Gym just paid its annual dividend of $5 per share, and it is widely expected that the dividend will increase by 2% per year indefinitely. a. What price should the stock sell at? The discount rate is 12%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Stock price b. What price should the stock sell at? The discount rate is 8%. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Stock price %24 %24The common stock of Dayton Repair sells for $41.95 a share. The stock is expected to pay $1.43 per share next year when the annual dividend is distributed. The company increases its dividends by 1.32 percent annually. What is the market rate of return on this stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
- Smiling Elephant, Inc., has an issue of preferred stock outstanding that pays a $5.10 dividend every year, in perpetuity. If this issue currently sells for $80.15 per share, what is the required return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Required return %You purchase 100 shares of stock for $47 a share. The stock pays a $3 per share dividend at year - end. What is the rate of return on your investment for these end-of-year stock prices? What is your real (inflation - adjusted) rate of return? Assume an inflation rate of 4%. (Round your answers to 2 decimal places. Use the minus sign for negative numbers if it is necessary.) a) End of year stock price = $43 Real rate of return = ? Real rate= ? b) End of year stock price = $47 Real rate of return= ? Real rate= ? c) End of year stock price = $50 Real rate of return= ? Real rate = ?Simtek currently pays a $3.5 dividend (D0) per share. Next year’s dividend is expected to be $4 per share. After next year, dividends are expected to increase at a 8 percent annual rate for 3 years and a 3 percent annual rate thereafter. Use Table II to answer the questions. Do not round intermediate calculations. Round your answers to the nearest cent. What is the current value of a share of Simtek stock to an investor who requires a 16 percent return on his or her investment?$ If the dividend in year 1 is expected to be $4 and the growth rate over the following 3 years is expected to be only 5 percent and then 3 percent thereafter, what will the new stock price be?$
- ABC isexpected to pay a dividend of $4.8 per share at the end of the year. The stocksells for $193 per share, and its required rate of return is 13.8%. Thedividend is expected to grow at some constant rate, g, forever. What is thegrowth rate (i.e. solve for g)?Note: Enter your answer rounded off to two decimal points.Do not enter % in the answer box. For example, if your answer is 0.12345 thenenter as 12.35 in the answer box.Farley Inc. has perpetual preferred stock outstanding that sells for $38.00 a share and pays a dividend of $3.00 at the end of each year. What is the required rate of return? Round your answer to two decimal places.A stock is expected to paid a dividend of f $2.9 you just sold it for $218. If you bought it for $100 one year ago, what is the stock's Holding Period Return? Round to 2 decimal places. Answer: