Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- You are evaluating the purchase of Bell, Inc. common stock that just paid a dividend of $4.60. You expect the dividend to grow at a rate of 10% for the next four years. You plan to hold the stock for four years and then sell it. You estimate the price of the company’s stock to rise to $59.37 at the end of your four-year holding period. A required rate of return of 13% will be adequate compensation for this investment. Given your assumptions, what is the current value of Bell stock? Round to the nearest $0.01 (allow a couple of pennies of rounding). answer is 26.57 , please dont use excelarrow_forwardTim Burr Wolff believes that Builtrite will pay the following dividends over the next 3 years: $3.30, $3.50 and $3.70. The current stock price is $49 and it is expected to sell at $61 by the end of the three years. Tim's required rate of return is 12%. What is the AYTM for Builtrite stock? 14.2% 15.2% 16.6% 21.7%arrow_forwardYou 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.)arrow_forward
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