« previous next »

Author Question: The effective annual rate for a continuously compounded 6.0 APR is about 6.184. Indicate whether ... (Read 106 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?

An identified risk factor for osteoporosis is the intake of excessive amounts of vitamin A. Dietary intake of approximately double the recommended daily amount of vitamin A, by women, has been shown to reduce bone mineral density and increase the chances for hip fractures compared with women who consumed the recommended daily amount (or less) of vitamin A.

Did you know?

More than 150,000 Americans killed by cardiovascular disease are younger than the age of 65 years.

Did you know?

In 1885, the Lloyd Manufacturing Company of Albany, New York, promoted and sold "Cocaine Toothache Drops" at 15 cents per bottle! In 1914, the Harrison Narcotic Act brought the sale and distribution of this drug under federal control.

Did you know?

To maintain good kidney function, you should drink at least 3 quarts of water daily. Water dilutes urine and helps prevent concentrations of salts and minerals that can lead to kidney stone formation. Chronic dehydration is a major contributor to the development of kidney stones.

Did you know?

Bacteria have flourished on the earth for over three billion years. They were the first life forms on the planet.

Characteristics of an effective leader Characteristics of an effective leader
Median Annual Earnings of Full-Time Workers, by Gender, 1960–2010 Median Annual Earnings of Full-Time Workers, by Gender, 1960–2010
Increasing access to care for teen mothers is important because they have a higher rate of pregnancy ... Increasing access to care for teen mothers is important because they have a higher rate of pregnancy ...
The Inclusive Classroom: Strategies for Effective Differentiated Instruction The Inclusive Classroom: Strategies for Effective Differentiated Instruction
Outgroup role in relative rate test Outgroup role in relative rate test
What amount was invested 35 years ago at 7% compounded semiannually if the value of the ... What amount was invested 35 years ago at 7% compounded semiannually if the value of the ...
Video: Gastroesophageal Reflux Disease (GERD)

For a complete list of videos, visit our video library