Your bank account pays an interest rate of 8 percent. You are considering buying a share of stock in XYZ Corporation for $110. After 1, 2, and 3 years, it will pay adividend of $5. You expect to sell the stock after 3 years for $120. Is XYZ a good investment? Support your answer with calculations.

Q: I. 1) Suppose you buy one share of stock for $50 and sell it for $100. Your profit is $50. If that…

A: Average annual rate (AAR) is the average annualized return of an investment, portfolio, asset, or…

Q: uppose an ordinary bond has a coupon rate of 10 percent, the yield to maturity is quoted at 12…

A: Coupon rate = 10% YTM = 12% maturity time = 10 years Assuming face value of bond = 1000

Q: What are the market information or background of companies found in Philippine Stock Exchange?

A: PSE, Philippine Stock Exchange is the national stock exchange of Philippines. The stock exchange is…

Q: suppose a stock worth $50 today is equally likely to be worth $100 or $25 a year from today. What is…

A: Stock A stock that is also known as equity is a financial instrument that represents the ownership…

Q: Investor Matt has $643,000 to invest in bonds. Bond A yields an average of 6% and the bond B yields…

A: Bonds are defined as a type of debt issued by the business firms to raise capital for their business…

Q: Is common stocks or bonds best for a high risk firm? Why?

A: Stock: When corporates trades in equity securities, Stock market is the place where the investors…

Q: 3. Your bank account pays an interest rate of 8 percent. You are considering buying a share of stock…

A: * SOLUTION :-

Q: Susie works two jobs so she can pay tuition without using loans, helps her sick mother with…

A: The act of allocating resources, often money, with the hope of making a profit or producing income…

Q: 1. A person invest $10,000 into an account that earns 6% in interest over 20 years. 1. How much will…

A: here we calculate the amount by simple and compound interest , and observe which one gives extra…

Q: Your father invested a lump sum 24 years ago at 5.75 percent interest compounded monthly. Today, he…

A: Today's value of the investment = $105,099.24 Rate of interest =5.75 compounded monthly. We have to…

Q: why do stock prices constantly change? Doesn’t this go against the law of supply and demand

A: Law of Demand states that other things being constant, an increase in price of good or service will…

Q: Consider a stock whose value increases across an 8-year period as shown in the table. Instructions:…

A: The initial value for each year will be the value from the previous year and the final value will be…

Q: Give your opinion on the current situation of stock market right now. Would it be profitable to…

A: The securities market could be a share market, but besides shares of corporations, different…

Q: Harpeth Valley Water District has a bond outstanding with a coupon rate of 3.31 percent and…

A: The term market price refers to the amount of money for what an asset can be sold in a market. Here,…

Q: 3. Paul Davies owns a British Consul, a security which pays the equivalent of $2000 U.S. each year…

A: A financial concept known as the present value (PV) depicts the current worth of expected future…

Q: Your father invested a lump sum 24 years ago at 5.75 percent interest compounded monthly. Today, he…

A: Present value (PV) is the current value of a future sum of money or stream of cash flows given a…

Q: asmeen purchased stock on January 30, 2017. If she wishes to achieve a long-term holding period,…

A: Capital assets are a type of asset the taxpayer purchases as a long-term investment. The purpose of…

Q: Which of the following is an example of a stock rather than a flow? Group of answer choices Derek…

A: A stock refers to a quantity of something at a given point in time. Stocks can change over time, but…

Q: 2. A bond pays 4% interest for four years; has a future value of $1000. Calculate the present value…

A: Present value conveys the current worth of a future series of cash flows based on the specified rate…

Q: minutes please with

A: Given Constant monthly payment = 3000 $ Time = 15 years Interest rate = 8 % Monthly rate = 8 / 12 =…

Q: What are some of the major differences between common stock and preferred stock

A: A stock (sometimes called equity) is a financial instrument that represents ownership of a share of…

Q: ) At the end of one year, how much will Alex and Spenser have? b) If Alex and Spenser leave their…

A: Compound interest : Compound interest is a situation we start earning on the interest rate also . We…

Q: A preferred stock pays an annual dividend of $1.25. What is one share of this stock worth today if…

A: * SOLUTION :-  * Given that ,  The annual devidend = $1.25 The rate of return  = $ 13.5   * Price of…

Q: You own a 6%bond and want to sell it in a yearl Di you hope that interest rates rise or fall?…

A: there are a lot of signals where we can say that we have to sell the bond.

Q: If value of output is $310 million and sales is $270 million Find the change in stock

A: The data presented in the question is as follows:- Value of output = $310 million Sales = $270…

Q: What would be the effect of increased demand for the company's stock?

A: The very known law of Demand is quite applicable to the financial markets and an increase in the…

Q: Explain how shares of stocks differ from mutual funds.

A: A stock (also referred to as equity) is a security reflecting the ownership of a fraction of a…

Q: How might the magnitude of the market risk premium impact someone's desire to buy stocks?

A: A risk premium is the projected investment return on an asset that is higher than the risk-free rate…

Q: what equation can determine whether a stock or asset is overvalued significantly?

A: Technical and quantitative analysis are used by traders to determine if a stock is overvalued.…

Q: Annuity Suppose that you are thinking of buying a car that yields a rental of $5,000 each year for 3…

A: To determine how much you should be willing to pay for the car, we can calculate the present value…

Q: Describe one of the simple method that is commonly used to screen capital investments?

A: The payback method is one of the simple methods used for the screening of capital investment before…

Q: 2 A firm is planning to pay a dividend of $1.50 in a year. The growth rate of dividend is expected…

A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…

Q: You expect a share of EconNews.Com to sell for $71 a year from now and to pay a $3 dividend per…

A: The formula used - PW of selling price + PW of dividend Here, PW of selling price = 71/ (1+i) PW of…

Q: What will happen if two assets are earning the same expected return, but one is more risky than the…

A: The uncertainty that may occur in the future is referred to as risk. The minimum profit you obtain…

Q: What is the current price of a $1,000 discount bond that matures in 5 years if the yield to maturity…

A: As it is given in the question that Time n=5 YTMR = 5% current price =$1,000

Q: A twenty year bond with a $1000 face value was issued with a yield to maturity of 4.5% and pays…

A: Given Data,PV = 960.09FV = 1000

Q: John owns the following portfolio of stocks. What is the return on her portfolio? Stock Amount…

A: The rate of return on a portfolio is the ratio of the net gain or loss which a portfolio generates,…

Q: nas purch $15,000 machine. You can pay now and take a percent discount or pay $6,000 each year for…

A: The interest rate is the amount a lender charges a borrower and is a percentage of the principal the…

Q: 35. Which of the following is the correct way to compute the future value of $100 put into an…

A: The future value can be given as:  F = P (1 + R)t Where: P : Present value F: Future valueR :…

Q: You have decided to invest in an open-end mutual fund. You are currently looking at a…

A: Name = nNAV = 36.25net change = 0.15YTD = 6.95