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Author Question: Royal Bank common shares pay dividends annually. They just paid a 1.50 dividend. Stock holders ... (Read 54 times)

mikaylakyoung

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on: Jul 10, 2018
Royal Bank common shares pay dividends annually. They just paid a 1.50 dividend. Stock holders require a return of 12. Royal is expected to continue paying dividends that will grow at 3.5 per annum in perpetuity.
 
  What is the fair price of a share of Royal Bank stock?
  A) 18.26
  B) 12.50
  C) 17.65
  D) 18.90
  E) 16.72

Question 2

Which of the below is NOT a major component of interest rates?
 
  A) Real rate
  B) Inflation premium
  C) Historical interest rates
  D) Default premium


Madisongo23

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Reply #1 on: Jul 10, 2018
Answer to Question 1

A

Answer to Question 2

Answer: C


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