TSC, Inc. sells for $24 and pays an annual per share dividend of $2.10, which you expect to grow at 10 percent. What is your expected return on this stock? Round your answer to the two decimal places. % What would be the expected return if the price were $33 a share? Round your answer to the two decimal places.

TSC, Inc. sells for $24 and pays an annual per share dividend of $2.10, which you expect to grow at 10 percent. What is your expected return on this stock? Round your answer to the two decimal places. % What would be the expected return if the price were $33 a share? Round your answer to the two decimal places.

Name: TSC, Inc. sells for $24 and pays an annual per share dividend of $2.10
Uploaded: 2024-03-20T06:51:32.000Z
Channel: Bartleby
Description: TSC, Inc. sells for $24 and pays an annual per share dividend of $2.10, which you expect to grow at 10 percent. What is your expected return on this stock? Round your answer to the two decimal places. %What would be the expected return if the price

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 17P

See similar textbooks

Similar questions

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 places
If you originally bought a share of stock for $27, and in one year it paid a dividend of $4 and now costs $33. You sell the stock today for $33, what is your percentage return? (answer in percent, but without the percent sign, e.g. "8.25" is 8.25%)
TSC, Inc. sells for $26 and pays an annual per share dividend of $1.00, which you expect to grow at 8 percent. What is your expected return on this stock? What would be the expected return if the price were $35 a share?
Suppose you bought XYZ stock 1 year ago for $6.54 per share and sell it at $2.79. You also pay a commission of $0.35 per share on your sale. What is the total return on your investment? The total return is %?
TSC, Inc. sells for $36 and pays an annual per share dividend of $2.10, which you expect to grow at 5 percent.What is your expected return on this stock?
A stock is selling today for $60 per share. At the end of the year, it pays a dividend of $3 per share and sells for $66. Required: a. What is the total rate of return on the stock? b. What are the dividend yield and percentage capital gain? c. Now suppose the year-end stock price after the dividend is paid is $51. What are the dividend yield and percentage capital gain in this case?
Suppose you purchase one share of the stock of Red Devil Corporation at the beginning of year 1 for $46.50. At the end of year 1, you receive a dividend of $2, and buy one more share for $50.50. At the end of year 2, you receive total dividends of $4 (i.e., $2 for each share), and sell the shares for $58.50 each. What is the time-weighted return on your investment? (Round your answer to 2 decimal places. Do not round intermediate calculations.)
You have just purchased a share of stock for $ 21.41. The company is expected to pay a dividend of $0.72 per share in exactly one year. If you want to earn a 9.4% 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 $________? (Round to nearest cent)
You buy a share of The Ludwig Corporation stock for $23.20. You expect it to pay dividends of $1.02, $1.0761, and $1.1353 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $27.24 at the end of 3 years. Calculate the growth rate in dividends. Round your answer to two decimal places. % Calculate the expected dividend yield. Round your answer to two decimal places. % Assuming that the calculated growth rate is expected to continue, you can add the dividend yield to the expected growth rate to obtain the expected total rate of return. What is this stock's expected total rate of return (assume market is in equilibrium with the required rate of return equal to the expected return)? Do not round intermediate calculations. Round your answer to two decimal places. %
You have just purchased a share of stock for $20.29.The company is expected to pay a dividend of $0.52 per share in exactly one year. If you want to earn a 9.1% 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 $_______.(Round to the nearest cent.)
A stock is selling today for $40 per share. At the end of the year, it pays a dividend of $2 per share and sells for $44. Required: a. What is the total rate of return on the stock? b. What are the dividend yield and percentage capital gain? c. Now suppose the year-end stock price after the dividend is paid is $36. What are the dividend yield and percentage capital gain in this case? Complete this question by entering your answers in the tabs below. Required A Required B Required C Now suppose the year-end stock price after the dividend is paid is $36. What are the dividend yield and percentage capital gain in this case? (Negative amounts should be indicated by a minus sign. Enter your answers as a whole percent.) Dividend yield Capital gains yield
2. Answer both questions: a. You purchase 100 shares of stock for $40 a share. The stock pays a $2 per share dividend at year-end. What is the rate of return on your investment if the year-end stock prices turn out to be $38, $40, and $42? What is your real (inflation-adjusted) rate of return in each case, assuming an inflation rate of 3%? b. Consider the following information on the returns on stock and bond investment. Scenario Profitability Stocks Bonds Recession .2 -5% +14% Normal Economy .6 +15% +8% Boom .2 +25% +4% i) Calculate the expected rate of return and standard deviation in each investment. ii) Do your results support or contradict the historical record on the relationship between risk and return in the financial market in both Canada and the United States? iii) Which investment would you prefer? Explain your answer.