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Author Question: Blockbuster Inc just paid a dividend of 2 per share. Dividends are expected to grow at a rate of -50 ... (Read 115 times)

TVarnum

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on: Jul 10, 2018
Blockbuster Inc just paid a dividend of 2 per share. Dividends are expected to grow at a rate of -50 annually over the next three years. After that, it is expected that Blockbuster will cease paying dividends forever.
 
  What is the fair market price for a share of Blockbuster if shareholders require a return of 12?
  A) 0
  B) 1.47
  C) 1.61
  D) 2.21
  E) 2.95

Question 2

Shylock Bank offers a savings account with an effective interest rate of 9 and quarterly compounding. What is the nominal rate (APR) on the account?
 
  A) 8.71
  B) 8.00
  C) 7.55
  D) 6.00
  E) 7.70


jharrington11

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

B

Answer to Question 2

A


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TVarnum

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Reply #2 on: Jul 10, 2018
Thank you :)


jharrington11

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Reply #3 on: Jul 10, 2018
Happy to help you


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