FIN 550 Homework Student Workbook
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School
Southern New Hampshire University *
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Course
550
Subject
Finance
Date
Feb 20, 2024
Type
xlsx
Pages
12
Uploaded by AmbassadorZebra1442
Assignment 3-1, Question 1
1a. Calculate the value of the stock today:
1. Calculate the PV of the dividends paid during the supernatural grow
$
%
$1.15
x
1.15
=
$1.32
x
1.15
=
$1.52
x
1.13
=
PV of Dividends = 1.72
+
30.36
2. Find the PV of Turbo's stock price at the end of Year 3:
=
=
32.08
0.892857
=
28.64285256
=
$ 28.64 3. Sum the two components to find the value of the stock today:
$
+
25.22
+
1.2
+
D
1
=
D
2
=
D
3
=
P
3
^ =
____D
4
____
__ _D
3
(1+g)______
r
s
-g
r
s
-g
PV of P
3
^ =
Value of current stock (P
0
) = 1b. Calculate P
1
^ and P
2
^.
P
1
^ =
$ +
$ =
1c. Calculate the dividend yields and capital gains yield for Years 1, 2, and 3. Year Dividend Yield
+
1
$1.3225/$25.23 ≈ 5.24%
+
2
$1.52/$26.93 ≈ 5.65%
+
3
$1.72/$28.64 ≈ 6.00%
+
P
2
^ =
wth period:
$ $1.32
$1.52
$1.72
+
0.797
=
25.92
$
=
$
1.30 =
31.56
$
Capital Gains Yield
=
Total Return
($26.93 - $25.23) / $25.23 ≈ 6.74%
≈
12%
$28.64/$26.93-1≈ 6.35%
≈
12%
$30.36 / $28.64 ≈ 6.00%
≈
12%
Assignment 3-1, Question 2
=
10%
r
ps
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Related Questions
Q2 - Returns on stocks X and Y are listed below:
Period 1 2 3 4 5 6 7Stock X 4% -2% 5% -1% 10% 7% 12%Stock Y -3% 7% 4% 2% 2% 8% -3%
Consider a portfolio of 10% stock X and 90% stock Y.
What is the mean of portfolio returns?
Please specify your answer in decimal terms and round your answer to the nearest thousandth (e.g., enter 12.3 percent as 0.123).
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Solve question 2 (context in question 1, attached)
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What is the price of a stock at the end of Year 1 (P1) if the dividend for Year 2 (D2) is $5, the price at the end of Year 2 (P2) is $20, and the discount rate is 10 percent? (Round your answer to two decimal places.)
Multiple choice question.
$22.73
$25.00
$19.73
$18.18
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Question one
Suppose you have the following information from Muscat stock market
Stock
Share outstanding
Base day Closing price
Second day closing price
Salalah company
18
3
2.8
Dhofar power company
26
2.8
3.1
Oman company
10
4.1
2.1
Dhofar bank
28
3
1.8
Calculate
1. Price weighted index
2. Value weighted index
plz use the formula shows in the pictures
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Problem 2-12 (Algo)
Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock C
splits two for one in the last period.
Stock Po
A
B
P1 01
P2 02
00
140 145 145 145 145 145
135 290 130 290 130 290
270 290 280 290 145 580
C
Required:
Calculate the first-period rates of return on the following indexes of the three stocks (t = 0 to t = 1):
Note: Do not round intermediate calculations. Round your answers to 2 decimal places.
a. A market-value-weighted index.
b. An equally weighted index.
a. Rate of return
b. Rate of return
%
%
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Bhupatbhai
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4
t of
estion
Determine the market value of a Digicel Stock if Do = 3.00, Ks = 13%, G = 6%.
Select one:
O a.
O b.
O c.
O d.
$45.43
$30.29
$53.00
$3.18
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Q2
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klp.5
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Question 1 Consider the three stocks in the following table. P, represents price at time
t, and Qt represents shares outstanding at time t.
Po Qo P₁ Q₁
50 100 60 100
A
IB 30 200 24 200
C 20 200 30 200
a. Calculate the rate of return on a price-weighted index of the three stocks
b. Calculate the rate of return on a market value-weighted index of the three stocks
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1.
stock EPS share price Growth rate
A $0.30 $4.80 4%
B $0.40 $5.50 6%
C $0.50 $7.50 7%
D $0.60 $8.00 5%
Using the PEG ratio, rank the stocks in order of investment opportunity, the first having the best, the last having the worst.
A. C,B,D,A B. A,D,B,C C. C,D,B,A D. B,D,C,A
2.Which of the following not true regarding financial statement
A.Group financial statement be produced by each subsidiary as well as the parent entity
B.Profit must be separated between members of the parent company and that of minority interest
C.Minority interest share of equity represents that ‘part of a subsidiary’s equity not allocated to members of the parent company.
D.Group financial statements must be produced by the parent entity only.
E.None of the options provided.
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Only typed answer
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Price
Forward Dividend
1T Target Est
$75.20
$0.80
$87.76
Given the information in the table, if t he stock has a required return of 14.8%, what
is the value of the stock
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Pls help detailed
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Forward
Dividend
Price
1T Target Est
$75.20
$0.80
$87.76
Given the information in the table, ift he stock has a
required return of 5.5%, what is the value of the stock
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You calculated the value of a stock to be $108. The stock pays a dividend of $7.6. What is the most you should be willing to pay for the stock?
a.
$108+7.6
b.
less than $108
c.
$108
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Question content area top
Part 1
(Preferred stock valuation) What is the value of a preferred stock where the dividend rate is
13
percent on a
$100
par value, and the market's required yield on similar shares is
9
percent?
Question content area bottom
Part 1
The value of the preferred stock is
$enter your response here
per share. (Round to the nearest cent.)
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Research 3 stocks of your choice and answer the following questions.
1. What is the name of the stock?
2. What is the stock symbol?
3. What is its current price per share?
4. What was the 52 week high price for the stock?
5. What was the 52 week low price for the stock?
6. Why did you pick these stocks?
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Q1
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Please solve for only d)
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Question content area top
Part 1
(Related to Checkpoint 10.3) (Preferred stock valuation) Calculate the value of a preferred stock that pays a dividend of
$2.50
per share when the market's required yield on similar shares is
12
percent.
Question content area bottom
Part 1
The value of the preferred stock is
$enter your response here
per share. (Round to the nearest cent.)
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BASIC (Questions 1-18)
1. Calculating Returns Suppose a stock had an initial price of $87 per share,
paid a dividend of $2.15 per share during the year, and had an ending share
price of $98. Compute the percentage total return. What was the dividend
yield? The capital gains yield?
LO 1
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