An investor is going to buy a stock. He/she expects to receive 1.5 TL quarterly dividends and plans to sell the stock at 25 TL one year later. His/her annual required rate of returr is 12%. What is the maximum price c the stock to be paid today?

Q: how much should you be willing to pay for this stock today?

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Q: ) You are planning to buy a stock, which is estimated to pay dividends of $2.10 next year and grow…

A: In this we have to calculate the constant growth model.

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A: The dividend discount model is used to find out the current price of the stock by calculating the PV…

Q: The current price of a stock is 25. The stock pays quarterly dividend of 0.02 with the first…

A: Given: Current stock price = 25 Dividend = 0.02 Rate of interest = 5% = 0.05

Q: BC is expected to pay ¢500 dividend per share next year, and then sell for ¢2,000 thereafter. our…

A: Next dividend (D1) = ¢500 Price after one year (P1) = ¢2,000 Discount rate (r) = 28%

Q: An investor requires a return of 12 percent. A stock sells for $18, it pays a dividend of $1, and…

A: Gordon's growth model is one of the most commonly used variations of the dividend discount model.…

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A: As per the DDM Model, value of stock in year 0 = D1/(r-g) D1 = Dividend next year r = Required rate…

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A: Stock price willing to pay will be the present value of all the cash inflows. PV of cash inflows= Pv…

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A: The Gordon model is a model that helps to compute the fair price of the stock with the help of…

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A: Forward/Future Contract is a derivative contract which is settled at a pre-defined time at…

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A: Present Value :— It means Value of Cash Flow today. It consider Time value of money for its…

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A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

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A: Computation:

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A: Particulars Year Amount Dividend 1 1.00 Dividend 2 1.25 Dividend 3 1.50 Share price 3 20.00…

Q: Assume that you are considering an investment in a stock that is expected to pay a constant dividend…

A: In this question we need to compute the value of stock from following details : Annual dividend = 3…

Q: The stock that is selling for GH¢12 today is expected to pay GH¢1 next year, GH¢2 the year after and…

A: We will use the dividend discount model to find the price of the share after 3 years

Q: You invest $10,000 in a stock and hold the stock for 3 years. Over the 3 year period, your…

A: value of the stock = investment*(1+gm)^3

Q: The current price of a stock is $78.86. If dividends are expected to be $1.00 per share for the next…

A: Current Rice (Po) = $ 78.86 Dividend from Year 1  to Year 5 = $ 1.00 Rate of return = 8 % PRice of…

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A: The question is based on the concept of Security valuation

Q: Suppose you are willing to pay $30 today for a share of stock which you expect to sell at the end of…

A: annual rate of return formula: annual rate of return =selling price+dividendbuying price-1

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Q: Preferred Products has issued preferred stock with an annual dividend of $8.25 that will be paid in…

A: The perpetuity is the never ending time period for the valuation of price of preferred shares. The…

Q: You consider buying a share of stock at a price of $950. The stock is expected to pay a dividend of…

A: expected return formula: expected return=selling price+dividendbuying price-1

Q: A stock costs $100 and pays a $6 annual dividend. If you expect to sell the stock after seven years…

A: Using excel Rate function

Q: Best Corporation is expected to pay $.60 next year and $1.10 the following year and $1.25 each year…

A: Dividend discounting model will be applied for discounting the future dividend in order to find out…

Q: You just purchased a stock for 21.43. If you expect the dividend in one year to be $ 2.25 and you…

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Q: The current price of a stock is $200. Over the next year, it is expected to go up or down by 14% or…

A: Current Stock Price is $200 Expectation of going up is 14% Expectation of going down is 13% Dividend…

Q: expect a share of EconNews.Com to sell for $65 a year from now. If you are willing to pay $65.74 for…

A: when calculating the dividend expected of a stuff it is important to consider the growth prospect of…

Q: Your broker recommends that you purchase Good Mills at $30. The stock pays a $2.20 annual dividend,…

A: In order to evaluate whether to buy the stock or not one should calculate the current stock price.

Q: A stock is expected to pay a dividend of $1 per share in 2 months and in 5 months. The stock price…

A: Given: Particulars Amount Dividend in 2 months 1 Dividend in 5 months 1 Stock price 60…

Q: b)  Suppose you are willing to pay $30 today for a share of stock which you expect to sell at the…

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

A: Stock Worth = $50 Equally worth stock $100 or $25  Highest price = $100 Lowest price = $25…

Q: If you have a stock which pays a $1.45 dividend which is expected to grow at 15% for four years,…

A: Last dividend = $ 1.45 Growth rate for 4 years = 15% Growth rate after 4 Years = 6% Discount rate =…

Q: If you buy a stock for a price of $23 and if you expect the stock to pay a dividend of $1.242 one…

A: As per the Constant Growth Dividend Discount Model, Value of Share  =  Dividend per share /…

Q: An irredeemable preference stock will pay a dividend of Shs.6 next year. The dividend is  expected…

A: given, r=12% g=4% D1= 6 growth for next two years = 8%