FIN 550 Homework Student Workbook

.xlsx

School

Southern New Hampshire University *

*We aren’t endorsed by this school

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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