You are interested in buying the preferred stock of a bank that pays a dividend of $1.75 every quarter. If you discount such cash flows at 7 percent, what is the value of this stock?
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A: cost of preferred equity = annual dividend / stock price
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Q: is this stock a good buy
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Q: The Hold Up Bank has issued 40,000,000 shares of preferred stock. Each share pays a $2.00 quarterly…
A: Cost of preferred equity = Dividend/share price
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A: Purchase price=$10 selling price $11 dividend paid $1
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Q: You are interested in buying the preferred stock of a bank that pays a dividend of $1.55 every…
A: Dividend each quarter (D)= 1.55 Required rate per quarter (k)=8%/4= 2%
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You are interested in buying the
To arrange the funds, firm issues various securities in the market. Preferred stock is one of them. Firm has to pay fixed dividend on it.
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- You are interested in buying the preferred stock of a bank that pays a dividend of $1.55 every quarter. If you discount such cash flows at 8 percent, what is the value of this stock? Value of the stock $enter the value of the stockYou are interested in buying the preferred stock of a bank that pays a dividend of RM1.80 every quarter. If you discount such cash flows at 8 percent, what is the price of this stock?Your bank account pays an interest rate of 8 percent. You are considering buying a share of stock in XYZ Corporation for $110. After 1, 2, and 3 years, it will pay a dividend of $5. You expect to sell the stock after 3 years for $120. Is XYZ a good investment? Support your answer with calculations
- You are valuing a bank. The bank currently has assets of $320 per share. Five years from now (that is, at the end of five years), you expect their assets per share to be $460. After Year 5. you expect their assets per share to grow at 3.5 percent per year forever. The bank has an ROA of 1.6 percent and an ROE of 12.0 percent. The bank's cost of equity is 11.0 percent. What is the value of the bank's stock? Use the free cash flow to equity model to value this stock. Do not round intermediate calculations. Round your answer to the nearest cent.Based on the $10,000 drop in market value outlined in (5) to $30,000, what is the % gain/loss on your initial deposit? (5) You purchase $40,000 worth of stock by borrowing $20,000 from Morgan Stanley and paying $20,000 yourself. If the market value drops by $10,000, what is the remaining equity in your account?In you cash account, you buy 100 shares of XYZ Corporation at a price of $10 per share. Two months later, XYZ pays a dividend $0.21 per share. You sell all 100 shares of XYZ three months later at a price of $12 per share. If you wanted to lever up the returns of this trade, you could have executed it in your _____ account. A) cash B) margin C) brokerage D) bank If you borrowed 50% of the upfront investment amount, your return (in percent terms) would have been _____. A) 11.10 B) 22.10 C) 44.20
- You have 100 million dollars in your investment account and choose to keep your money allocated in the following proportion and rebalance each quarter. i. 60% in stocks via ETF SPY ii. 35% in bonds via ETF TLT iii. 5% in cash Over the month of september , SPYwent from $452 to $429, and TLT went from $149 per share to $144 per share. Cash has an interest rate of 0.1% annually. a) What is your overall account $ balance before rebalancing? What proportions of that is in SPY, TLT, and cash respectively? b) How do you rebalance your account to keep the allocation at 60-35-5 for SPY TLT and cash respectively? What to buy and what to selll in dollar amount?Your broker recommends that you purchase Good Mills at $34. The stock pays a $2.20 annual dividend, which (like its per share earnings) is expected to grow annually at 3 percent. If you want to earn 9 percent on your funds, is this stock a good buy?The First Bank of Flagstaff has issued perpetual preferred stock with a $100 par value. The bank pays a quarterly dividend of $1.70 on this stock. What is the current price of this preferred stock given a required rate of return of 12.5 percent? - Current Price $
- A company has an issue of preferred stock outstanding that pays a $2.30 dividend every year in perpetuity. If this issue currently sells for $41.82 per share, what is the required rate of return? Please use a HP 10bii+ Financial CalculatorTwelve months ago you purchases shares of a no-load mutual fund for $22.25 per share. The fund distributed cash dividends of $0.90 and capital gains of $1.25 per share. If the net asset value is $24.45, what was the annual rate of return?Suppose that, as a fund manager, you purchase 5,000 shares of Company X on 1 January 2019 for $10 each in order to keep and earn dividends. Simultaneously, you also purchase 4,000 shares of Company Y for $7.5 each for trading purposes. The share price of Company X increases to $12 first, but after some days it drops to $11.2 and you immediately sell 3,000 shares. On the other hand, the share price of Company Y drops to $7 first, but after some days it increases to $7.6 and you immediately sell 2,500 shares. (Note that, funds make valuation on a daily basis) Assuming that there are no more price movements throughout the year, what would be the total comprehensive income as of the year end? A) $2,400B) $4,000C) $6,400D) $7,100E) Other (Please Specify)