« previous next »

Author Question: The effective annual rate for a continuously compounded 6.0 APR is about 6.184. Indicate whether ... (Read 96 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?

Most childhood vaccines are 90–99% effective in preventing disease. Side effects are rarely serious.

Did you know?

As of mid-2016, 18.2 million people were receiving advanced retroviral therapy (ART) worldwide. This represents between 43–50% of the 34–39.8 million people living with HIV.

Did you know?

There are more sensory neurons in the tongue than in any other part of the body.

Did you know?

During pregnancy, a woman is more likely to experience bleeding gums and nosebleeds caused by hormonal changes that increase blood flow to the mouth and nose.

Did you know?

More than 2,500 barbiturates have been synthesized. At the height of their popularity, about 50 were marketed for human use.

Changes in the abundance and egg-hatching success rate of prairie chickens. Changes in the abundance and egg-hatching success rate of prairie chickens.
Which wavelengths of light are most effective at photosynthesis? Which wavelengths of light are most effective at photosynthesis?
Hand signals are an effective emergency backup to ra- dio communication systems. Shown are several ... Hand signals are an effective emergency backup to ra- dio communication systems. Shown are several ...
Fertility, Mortality, and the Net Rate of Reproduction in Sweden Fertility, Mortality, and the Net Rate of Reproduction in Sweden
Human Relations: The Art and Science of Building Effective Relationships Human Relations: The Art and Science of Building Effective Relationships
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: What is Cholesterols? Introduction to Lipoproteins

For a complete list of videos, visit our video library