This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Assume that the stock of Perry Corporation has just paid an annual dividend of 5, and that this ... (Read 104 times)

dmcintosh

  • Hero Member
  • *****
  • Posts: 517
on: Jul 10, 2018
Assume that the stock of Perry Corporation has just paid an annual dividend of 5, and that this dividend is expected to grow for the next 2 years at an annual growth rate of 20, and then grow indefinitely at an annual growth rate of 10.
 
  If the risk-free rate is 5, the expected return on the market is 15, and the firm's beta is 0.80, how much should you be willing to pay for this stock?
  A) 203.28
  B) 217.70
  C) 256.81
  D) 315.09
  E) 360.25

Question 2

A real estate agent wants you to buy a plot of land today for 60,000 and he promises that you can sell it back to him in 7 years for 100,000.
 
  If you can earn 9 on alternative investments, then what is the present value of the sales proceeds? Is this a worthwhile investment?
  A) 54,703.42; it is not a worthwhile investment.
  B) 54,703.42; it is a worthwhile investment.
  C) 61,294.51; it is not a worthwhile investment.
  D) 61,294.51; it is a worthwhile investment.
  E) 60,000; not enough information.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

leahchrapun

  • Sr. Member
  • ****
  • Posts: 332
Reply #1 on: Jul 10, 2018
Answer to Question 1

B

Answer to Question 2

A


dmcintosh

  • Member
  • Posts: 517
Reply 2 on: Jul 10, 2018
:D TYSM

mcarey591

  • Member
  • Posts: 365
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

« previous next »
 

Did you know?

Dogs have been used in studies to detect various cancers in human subjects. They have been trained to sniff breath samples from humans that were collected by having them breathe into special tubes. These people included 55 lung cancer patients, 31 breast cancer patients, and 83 cancer-free patients. The dogs detected 54 of the 55 lung cancer patients as having cancer, detected 28 of the 31 breast cancer patients, and gave only three false-positive results (detecting cancer in people who didn't have it).

Did you know?

Anesthesia awareness is a potentially disturbing adverse effect wherein patients who have been paralyzed with muscle relaxants may awaken. They may be aware of their surroundings but unable to communicate or move. Neurologic monitoring equipment that helps to more closely check the patient's anesthesia stages is now available to avoid the occurrence of anesthesia awareness.

Did you know?

Patients who have been on total parenteral nutrition for more than a few days may need to have foods gradually reintroduced to give the digestive tract time to start working again.

Did you know?

The first war in which wide-scale use of anesthetics occurred was the Civil War, and 80% of all wounds were in the extremities.

Did you know?

The top five reasons that children stay home from school are as follows: colds, stomach flu (gastroenteritis), ear infection (otitis media), pink eye (conjunctivitis), and sore throat.

During their annual migration, the entire population of Arctic terns move from the Arctic Ocean in t During their annual migration, the entire population of Arctic terns move from the Arctic Ocean in t
China’s 8% annual increase in oil consumption China’s 8% annual increase in oil consumption
A photograph of Commodore Matthew Perry in 1855 juxtaposed with a Japanese portrait of him. When Per A photograph of Commodore Matthew Perry in 1855 juxtaposed with a Japanese portrait of him. When Per
Annual Federal Deficit (or Surplus), 1992–2016 Annual Federal Deficit (or Surplus), 1992–2016
For the circuit in Figure 1, assume ideal diodes. The peak inverse voltage is approximately For the circuit in Figure 1, assume ideal diodes. The peak inverse voltage is approximately
Nitin earns $48,000 per year. Determine his gross earnings for each pay period if he is paid ... Nitin earns $48,000 per year. Determine his gross earnings for each pay period if he is paid ...
Video: Genetics of Cancer

For a complete list of videos, visit our video library