Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Voltanis Corp. has preferred stock outstanding that will pay an annual dividend of $4.29 every year in perpetuity. If the stock currently sells for $101.03 per share, what is the required return?
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- 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 $4 and the growth rate over the following 3 years is expected to be only 5 percent and then 3 percent thereafter, what will the new stock price be?$arrow_forwardTSC, Inc. sells for $23 and pays an annual per share dividend of $1.20, which you expect to grow at 8 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 $36 a share? Round your answer to the two decimal places. %arrow_forwardA stock is selling today for $50 per share. At the end of the year, it pays a dividend of $3 per share and sells for $59. 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 $44. What are the dividend yield and percentage capital gain in this case?arrow_forward
- Poulter Corporation will pay a dividend of $4.40 per share next year. The company pledges to increase its dividend by 5.75 percent per year, indefinitely. If you require a return of 10 percent on your investment, how much will you pay for the company's stock today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current stock pricearrow_forwardCarpenter, Inc. has perfected stock that pays a dividend of $2.25 at the end of each year. If your required rate of return is 9.25%, what is the value of this preferred stock?arrow_forwardThe preferred stock of PAY Inc. pays an annual dividend of $3.75 and sells for $47.80 a share. What is the rate of return on this security?arrow_forward
- Smiling Elephant, Inc., has an issue of preferred stock outstanding that pays a $5.90 dividend every year, in perpetuity. If this issue currently sells for $80.55 per share, what is the required return?arrow_forwardYou originally purchased Hershey stock at $161. It paid a dividend of $3.00 in the last year. Currently, the stock is selling for $156 per share. What is your total return if you sell the stock today?arrow_forwardMcKerley Corporation has preferred stock outstanding that will pay an annual dividend of $3.25 per share with the first dividend exactly 11 years from today. If the required return is 3.51 percent, what is the current price of the stock?arrow_forward
- XYZ Company announced today that it will begin paying annual dividends next year. The first dividend will be $0.1 a share. The following dividends will be $0.2, $0.3, and $0.4 a share annually for the following 3 years, respectively. After that, dividends are projected to increase by 3 percent per year. How much are you willing to pay to buy one share of this stock today if your desired rate of return is 10%?arrow_forwardKeidis Industries will pay a dividend of $4.15, $5.25, and $6.45 per share for each of the next three years, respectively. In four years, you believe that the company will be acquired for $59.00 per share. The return on similar stocks is 11.7 percent. What is the current stock price?arrow_forwardTSC, 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?arrow_forward
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