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Kobotan [32]
3 years ago
13

You want to invest in a stock that pays​ $2.00 annual cash dividends for the next four years. At the end of the four​ years, you

will sell the stock for​ $27.00. If you want to earn​ 11% on this​ investment, what is a fair price for this stock if you buy it​ today?
Business
1 answer:
Vika [28.1K]3 years ago
8 0

Answer:

Po =   <u>D1   </u>     +  <u> D2   </u>  +    <u> D3    </u>    +          <u> D4 + P4</u>

        (1 +K)         (1 +K)2       (1 + k)3               (1 + K)4

Po =  <u> $2.00 </u>   +  <u> $2.00  </u>   +   <u>$2.00 </u>    +    <u>$2.00 + $27.00</u>

         (1 + 0.11)      (1 + 0.11)2    (1 + 0.11)3        (1 + 0.11)4

Po =  <u> $2.00  </u>  +   <u>$2.00</u>     +  <u> $2.00</u>     +    <u>$29.00</u>

          (1.11)              (1.11)2           (1.11)3             (1 .11)4

Po = $1.80       +     $1.62     +   $1.46      +      $19.10

Po = $23.98

Explanation:

The current market price  of the stock is a function of dividend in year 1 divided by 1 + r plus the dividend in year 2 divided by 1 + r raised to power 2 plus dividend in year 3 divided by 1 + r raised to power 3 plus the aggregate of dividend and market price in year 4 divided by 1 + r raised to power 4. r denotes required return on stock.

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A long term investment usually means an investment period of one to three months?
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False

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These are selected 2017 transactions for Blue Corporation: Jan. 1 Purchased a copyright for $79,500. The copyright has a useful
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Namita is voting in a state election. She selects the candidate she wants to be state senator, a position that involves drafting
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Answer:

Representative democracy.

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Representative democracy refers to a system where the people govern through the election of parties or representatives with decision-making rights. Representative democracy can also be seen as a collective term for a number of democratic models. Common to these, however, is that the core consists of regularly recurring elections between competing representatives. People's sovereignty is achieved by the citizens influencing the government by voting in these elections. It is by far the most widespread method of exercising authoritative and legitimate control, demanding responsibility and developing debate in modern democracies.

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You just acquired a home mortgage for 30 years in the amount of $184,500 at 4.65 percent interest, compounded monthly. How much
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Answer:

EMI=P*r * (1+r)^n/(1+r)^n-1

Where EMI= equal monthly installments

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n=numer of periods

Explanation:

P=$184,500

r=4.65%/12=.3875%

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