The spot price of a stock is $61.40 and it pays continuous dividends at a rate of 5%. Assume that all dividends are reinvested in the stock. You short 100 of these shares and borrow more stock to pay the dividends. After 3 months, the stock price is $60.79. The continuously compounded risk-free interest rate is 2%. What is the profit made in 6 months?

Suppose the call money rate is 4.5 percent, and you pay a spread of 2.5 percent over that. You buy 700 shares of stock at $61 per share. You put up $27,755. One year later, the stock is selling for $75 per share and you close out your position. What is your return assuming a dividend of $0.90 per share is paid?

Required: A share of stock is now selling for $75. It will pay a dividend of $6 per share at the end of the year. Its beta is 10. What must investors expect the stock to sell for at the end of the year? Assume the risk-free rate is 5% and the expected rate of return on the market is 13% (Round your answer to 2 decimal places) Answer is complete but not entirely correct. $ 80.00 Ⓒ

Gen Lab is expected to pay out a dividend of $0.75 per share in one year. The expected stock price in one year is $42 per share and the required return on the stock (also known as the cost of equity or the equity cost of capital) is 12%. What is the value of the stock today? Round your answer to two decimal places. Your Answer:

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 = ?

A non-dividend-paying stock is currently selling for $50, and the risk-free rate of interest is 8% per annum with continuous compounding for all maturities. An investor has just taken a short position in a six-month forward contract on the stock. a. What is the forward price？ (sample answer: $25.45) b. What is the initial value of the forward contract? (sample answer: $25.45) c. Three months later, the price of the stock is $48 and the risk-free rate is still 8% per annum. What is the forward price now? (sample answer: $25.45) What is the value of the short position in the forward contract? (sample answer: $25.45 or -$25.45

A stock pays a dividend of $0.60 the first year, $0.80 the second year, and $0.90 the third year. The dividend is then expected to grow at a constant rate of 7 %, forever. The discount rate is 16%. Currently, the stock selling for $10.00. Should the investors buy this stock?

You have just purchased a share of stock for $21.73. The company is expected to pay a dividend of $0.62 per share in exactly one year. If you want to earn a 10.5% return on your investment, what price do you need if you expect to sell the share immediately after it pays the dividend? The price one year from now should be $ nearest cent.) (Round to the

Pixar stock is expected to pay a single $1.7 dividend in 2.0 months. Suppose you enter into a 7.0 month forward contract to buy one share of Pixar stock when the share price is $40.4 per and the risk-free interest rate is 6.25 percent continuously compounded. What is the forward price? 37.331 40.155 43.645 40.137