Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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What is the maximum price Miss Piggy should pay for ThinkltThroo Corp. common stock if her required return is 5% and she expects to sell the stock in one year for $50 per share, immediately after she receives a $.50 per share dividend? O $50.00 O $48.10 O $48.00 O $40.73
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- You own 100 shares of stock that are earning $2 per share per year. According to market analysts, the stock is expected to continue to earn $2 long into the future. Using the annuity rule, and assuming an interest rate of 6.5 percent, it follows that the present value of these 100 shares is: Multiple Choice O O O O $30.77. $307.79. $3,076.92. $30,076.92.arrow_forwardYou purchase 100 shares of stock for $40 a share. The stock pays a $2 per share dividend at year-end. a. What is the rate of return on your investment if the end-of-year stock price is (i) $38; (ii) $40; (iii) $44? (Leave no cells blank - be certain to enter "0" wherever required. Enter your answers as a whole percent.) Stock Price Rate of Return 38 40 % 44 %arrow_forwardYou are considering acquiring a common share of Sahali Shopping Center Corporation that you would like to hold for 1 year. You expect to receive both if you $1.20 in dividends and $30 from the sale of the share at the end of the year. The maximum price you would pay for a share today is wanted to earn a 12% return. Multiple Choice O O O $26.79 $27.86 $27.46 $35.45arrow_forward
- What should Chris be willing to pay for a preferred share of stock that promises to pay him a cash dividend of $95 at the end of each year, which will increase by 3% every year forever? The interest rate is fixed at 5.75% Chris should be willing to pay $ for a preferred share of the stock. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)arrow_forward3arrow_forwardYou plan to pay $80 for a share of preferred stock that pays a $2.80 dividend per year forever. What annual rate of return will you realize? Group of answer choices 18.66 % 1.73 % 6.0 % 5.0 % 3.50%arrow_forward
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