« previous next »

Author Question: The effective annual rate for a continuously compounded 6.0 APR is about 6.184. Indicate whether ... (Read 33 times)

moongchi

  • Hero Member
  • *****
  • Posts: 516
on: Jul 10, 2018
The effective annual rate for a continuously compounded 6.0 APR is about 6.184.
 
  Indicate whether the statement is true or false.

Question 2

Natalie is interested in valuing the shares of Union Aerospace (UA). UA pays dividends annually. She expects the stock to pay dividends of 3 at the end of each of the next four years.
 
  Thereafter, she expects the dividend to grow at 7 per annum in perpetuity. If her required return is 12, then how much should she pay for a share?
  A) 43.63
  B) 45.54
  C) 47.24
  D) 49.91
  E) 73.31


TheDev123

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

Answer: TRUE
Explanation: EAR = e0.06 - 1 = 0.0618365 or 6.184

Answer to Question 2

D


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question

moongchi

  • Hero Member
  • *****
  • Posts: 516
Reply #2 on: Jul 10, 2018
Thank you :)


TheDev123

  • Sr. Member
  • ****
  • Posts: 332
Reply #3 on: Jul 10, 2018
Happy to help you


« previous next »
 

Did you know?

Hypertension is a silent killer because it is deadly and has no significant early symptoms. The danger from hypertension is the extra load on the heart, which can lead to hypertensive heart disease and kidney damage. This occurs without any major symptoms until the high blood pressure becomes extreme. Regular blood pressure checks are an important method of catching hypertension before it can kill you.

Did you know?

For high blood pressure (hypertension), a new class of drug, called a vasopeptidase blocker (inhibitor), has been developed. It decreases blood pressure by simultaneously dilating the peripheral arteries and increasing the body's loss of salt.

Did you know?

Complications of influenza include: bacterial pneumonia, ear and sinus infections, dehydration, and worsening of chronic conditions such as asthma, congestive heart failure, or diabetes.

Did you know?

Intradermal injections are somewhat difficult to correctly administer because the skin layers are so thin that it is easy to accidentally punch through to the deeper subcutaneous layer.

Did you know?

The first documented use of surgical anesthesia in the United States was in Connecticut in 1844.

Static Stability & Environmental Lapse Rate Static Stability & Environmental Lapse Rate
Advection of an air mass with a different ELR (environmental lapse rate). Advection of an air mass with a different ELR (environmental lapse rate).
Population growth rate % Population growth rate %
Factors That Affect Your Basal Metabolic Rate Factors That Affect Your Basal Metabolic Rate
Consider the production function ( ) 0.5 0.5 Y = AK L . Suppose both saving rate (s) and the ... Consider the production function ( ) 0.5 0.5 Y = AK L . Suppose both saving rate (s) and the ...
Rita borrows $4,500 from the bank at 9 percent annually compounded interest to be repaid in ... Rita borrows $4,500 from the bank at 9 percent annually compounded interest to be repaid in ...
Video: Smoking Cessation

For a complete list of videos, visit our video library