Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- Compute the price of a share of stock that pays a 2 per year dividend and that you expect to be able to sell in one year for 25, assuming you require a 10% return.arrow_forwardA stock which is sold at its face value of $3,000 is expected to pay a dividend of $120 for the next three years. It is expected that the price of this stock will increase by 7% of its initial face value each year. The nominal interest rate is 4% per year. What is the risk premium payable on this stock to induce investors to hold the stock for another two years? Risk premium (x) · = (Round your answer to two decimal places.)arrow_forwardA stock is expected to pay a dividend of $1.00 at the end of the year (i.e., D1 = $1.00), and it should continue to grow at a constant rate of 5% a year. If its required return is 12%, what is the stock's expected price 4 years from today? Do not round intermediate calculations. Round your answer to the nearest cent. $arrow_forward
- You are thinking about buying a stock and holding it for 3 years. You expect that the stock will pay a dividend of $1.37 in 1 year, $2.12 in two years, and $3.18 in three years. You expect to sell for $94.57 in 3 years. If the required return is 13.67%, what is the value of the stock.arrow_forwardanswer each component PLEASE.arrow_forwardWhat would be the price of a stock that pays an annual fixed dividend of $1.2 for ten years, and then the dividend payment increases by 1% every year, and the required rate of return is 5% annually?arrow_forward
- Olivia's dumplings has a current stock price of $35, and pays a constant dividend of $1.05 per year, ever year, forever. What is the required rate of return for this stock?arrow_forwardWhat would be the price of a stock that pays an annual fixed dividend of $1 for ten years, and then the dividend payment increases by 1% every year, and the required rate of return is 5% annually?arrow_forwardThe investor decides to hold the stock for 5 years. Using the Generalized Dividend valuation Model, calculate the current price per share if the stock pays a constant dividend of $2.3, the required return as a decimal is 0.14, and the expected price at the end of the 5 years is $110. (use 1 decimal place)arrow_forward
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