As financial advisor of Mr. X and you believe that the price of the stocks will increase to P10.70 next month. Will you advise Mr. X to purchase 150,000 stocks or 100,000 stocks only? Why or Why not?
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As financial advisor of Mr. X and you believe that the price of the stocks will increase to P10.70 next month. Will you advise Mr. X to purchase 150,000 stocks or 100,000 stocks only? Why or Why not?
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- You are planning to purchase the stock of Martie Inc. and you expect it to pay a dividend of $3 in 1year, $4.25 in 2 years, and $6.00 in 3 years. You expect to sell the stock for $100 in 3 years. If your required return for purchasing the stock is 12 percent, how much would you pay for the stock today?You own 300 shares of Finance Inc’s preferred stock which currently sells for $30.00 per share and pays annual dividends of $2.00 per share. i. What is the expected return? ii. If you require a 10% return, given the current price, should you sell or buy more stockYou bought 100 shares of GE stock for $25,000 on October 23, 2011. Your intention is to keep the stock until it doubles in value. If you expect 12% annual growth for GE stock, how many years do you expect to hold onto the stock? Compare your answer with the solution obtained by the Rule of 72
- You consider buying a share of stock at a price of $950. The stock is expected to pay a dividend of $10 next year, and your advisory service tells you that you can expect to sell the stock in 1 year only for $945. What is the expected rate of return?Jeyna is considering buying a stock. The company paid $10 in dividends in the last 12 months, with a stated intention to grow the dividends by 5.6% each year. What is a fair price for them to pay for this stock if they require a 15.7% return from their investment? Question 25 options: $99.01 $98.50 $102.64 $98.73Melissa Popp is thinking about buying some shares of Education, Inc., at $50 per share. She expects the price of the stock to rise to $75 over the next three years. During that time she also expects to receive annual dividends of $5 per share. a) What is the intrinsic worth of this stock, given a 10% required rate of return?
- Currently, inventors in the stock market expect the price of the XYZ corporation's stock next year to be $115. They also expect the corporation to pay $5 of dividend next year. Currently the price of stock is $100. The investors hear some good news about the corporation. As a result, they now expect the price of the stock next year to be $130 and for the corporation to pay a dividend of $8. According to the efficient markets hypothesis, the price of the stock today will jump to dollars.You bought 100 shares of GE stock for $25,000 on October 23, 2011. Your intention is to keep the stock until it doubles in value. If you expect 12% annual growth for GE stock, how many years do you expect to hold onto the stock?Suppose you are thinking of purchasing the Moore Co.’s common stock today. If you expect Moore to pay $2.5, $2.625, $2.73, and $2.81 dividends at the end of year one, two, three, and four respectively and you believe that you can sell the stock for $40.97 at the end of year four. If you required return on this investment is 9%, how much will you be willing to pay for the stock today?
- Compute the total and annual returns on the described investment. Six years after buying 200 shares of XYZ stock for $50 per share, you sell the stock for $15,000. The total return is ? %Assume that you plan to buy a share of National Company’s stock today and to hold it for 2 years. Your expectations are that you will not receive a dividend at the end of Year 1, but you will receive a dividend of P7.50 at the end of Year 2. In addition, you expect to sell the stock for P150 at the end of Year 2. If your expected rate of return is 15 percent, how much should you be willing to pay for this stock today? Use 5 decimal places in your computation Format: 111.11The stock of Suncor Energy is currently trading for $36 per share. An investor expects the stock price to move up in the next two months, and decided to invest $7, 200 in this stock. If the investor invests all the money in the stock, how much is the profit or loss if the stock price in two months turns out to be i) 40 or ii) 32? If the investor invests all the money in call options with a strike price of $35 and price of the call is $2 per share, how much is the profit or loss if the stock price in two months turns out to be i) 40 or ii) 32?
