21. A stock market analyst observes the following for the price of two stocks that he owns, one of which is increasing at an exponential rate (geometric) and the other is increasing in alinear fashion (arithmetic).Stock A: Equation: an 15n + 143, where an is the value of the stock and n is the number of years.Year Price12345Year12Stock B: Equation: a = 24(1.1)”−¹, where an is the value of the stock and n is the number of years.34$158.005$173.00$188.00$203.00$218.00Price$24.00$26.40$29.04$31.94$35.14Assuming these stock values continue to increase in the same manner until retirement, which stock option is worth more in 50 years and how much more is this stock worth per share?

Data given: Stock A: Equation: an=15n+143 Stock B: Equation: an=24*(1.1)n-1

21. A stock market analyst observes the following for the price of two stocks that he owns, one of which is increasing at an exponential rate (geometric) and the other is increasing in a linear fashion (arithmetic). Stock A: Equation: an = 15n+ 143, where an is the value of the stock and n is the number of years. Year Price 1 2 3 4 5 1 Stock B: Equation: a = 24(1.1)”—¹, where an is the value of the stock and n is the number of years. Year Price 2 3 4 $158.00 $173.00 5 $188.00 $203.00 $218.00 $24.00 $26.40 $29.04 $31.94 $35.14 Assuming these stock values continue to increase in the same manner until retirement, which stock option is worth more in 50 years and how much more is this stock worth per sha

21. A stock market analyst observes the following for the price of two stocks that he owns, one of which is increasing at an exponential rate (geometric) and the other is increasing in a linear fashion (arithmetic). Stock A: Equation: an = 15n+ 143, where an is the value of the stock and n is the number of years. Year Price 1 2 3 4 5 1 Stock B: Equation: a = 24(1.1)”—¹, where an is the value of the stock and n is the number of years. Year Price 2 3 4 $158.00 $173.00 5 $188.00 $203.00 $218.00 $24.00 $26.40 $29.04 $31.94 $35.14 Assuming these stock values continue to increase in the same manner until retirement, which stock option is worth more in 50 years and how much more is this stock worth per sha

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 8P: A stock is trading at $80 per share. The stock is expected to have a yearend dividend of $4 per...

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