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gladu [14]
3 years ago
11

Your broker has recommended that you purchase stock in Alacan, Inc. She estimates that the 1-year target price is $63.00, and Al

acan consistently pays an annual dividend of $7.00. Based on your analysis, you estimate that the stock has a required rate of 15.00%. What is the intrinsic value of this stock?
Business
1 answer:
Bogdan [553]3 years ago
3 0

Answer:

$60.87

Explanation:

You can solve this question using time value of money concept. Since this is a  dividend paying stock, the recurring dividends are annuities, next year's price is the future value, total duration is 1 year. Use these to calculate the current price; PV

Total duration; N = 1

Interest rate per year ; I/Y = 15%

Future value; FV = 63

Recurring dividend payment; PMT = 7

then compute the present value; CPT PV = 60.87

Therefore, the intrinsic value of this stock is $60.87

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3 years ago
Suppose you believe that Delva Corporation's stock price is going to decline from its current level of $82.50 sometime during th
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Answer:

B. $1,989.75

Explanation:

Cost of option (C) = $510.25

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Since the option allows you to sell shares that are valued at $60 for at $85 each, by selling 100 shares, your total earnings are:

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P=E-C= \$2,500-\$510.25\\P=\$1,989.75

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3 years ago
I know this will be deleted but any on wanna play pad lethttps://pad let.com/ejkindred27
navik [9.2K]

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sure

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what game?

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