Author Question: Nike's common shares are currently trading at 57.12. Dividends on this stock are paid annually and ... (Read 67 times)

WhattoUnderstand · **on:** Jul 10, 2018

Nike's common shares are currently trading at 57.12. Dividends on this stock are paid annually and are expected to grow at 2 per annum in perpetuity. Shareholders required return on this investment of 3.

The most recent dividend was paid yesterday and the next dividend will be paid in one year. How big was yesterday's dividend?
A) 0.55
B) 0.56
C) 0.57
D) 0.60
E) 0.62

Question 2

Jordan will need 20,000 at the end of 6 years to put a down payment on a house. What rate of return will he need to earn if he can invest 12,250 today?

A) 8.5
B) 7.5
C) 8.0
D) 9.0
E) 9.5