You own 100 shares of stock. It will pay (per share) $10 dividend in year 1, $25 dividend in years 2-9, and $175 liquidating dividend in year 10. The required return on the stock is 10%. a) What is the current stock price? b) You want the same amount of dividend in each of the 10 years and accomplish this by creating homemade dividends. Assume that you can buy/sell fractional shares. i. How many shares do you sell/buy at the end of year 1? ii. How many shares do you sell/buy at the end of year 2? iii. How many shares do you own at the beginning of year 10?
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- Suppose you purchase one share of the stock of Red Devil Corporation at the beginning of year 1 for $46.50. At the end of year 1, you receive a dividend of $2, and buy one more share for $50.50. At the end of year 2, you receive total dividends of $4 (i.e., $2 for each share), and sell the shares for $58.50 each. What is the time-weighted return on your investment? (Round your answer to 2 decimal places. Do not round intermediate calculations.)Assume you purchase a share of stock for $50 at time t=0, and another share at $65 at time t= 1, and at the end of year 1 and year 2, the stock paid a $2.00 dividend. Also, at the end of year 2 you sold both shares for $70 each. What is the time-weighted rate of return? Give typing answer with explanation and conclusionYou buy a share of Damanpour Corporation stock for $21.40. You expect it to pay dividends of $1.07, $1.1149, and $1.2250 in Years 1, 2, and 3 respectively. You also expect to sell the stock at a price of $26.22 at the end of three years. a. Calculate the growth rate in dividends. b. Calculate the expected dividend yield. c. Assuming that the calculated growth rate is expected to continue, you can add the dividend yield to the expected growth rate to determine the expected total rate of return. What is this stock's expected total rate of return?
- You buy a share of The Ludwig Corporation stock for $22.40. You expect it to pay dividends of $1.06, $1.1331, and $1.2113 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $27.36 at the end of 3 years. Calculate the growth rate in dividends. Round your answer to two decimal places. % Calculate the expected dividend yield. Round your answer to two decimal places. % Assuming that the calculated growth rate is expected to continue, you can add the dividend yield to the expected growth rate to obtain the expected total rate of return. What is this stock's expected total rate of return (assume market is in equilibrium with the required rate of return equal to the expected return)? Do not round intermediate calculations. Round your answer to two decimal places. %You buy a share of The Ludwig Corporation stock for $21.40. You expect it to pay dividends of $1.07, $1.1449, and $1.2250 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $26.22 at the end of 3 years. a. Calculate the growth rate in dividends. b. Calculate the expected dividend yield. c. Assuming that the calculated growth rate is expected to continue, you can add the dividend yield to the expected growth rate to obtain the expected total rate of return. What is this stock’s expected total rate of return? (Assume the market is in equilibrium with the required return equal to the expected return.)Suppose you purchase one share of the stock of Red Devil Corporation at the beginning of year 1 for $43.00 At the end of year 1, you receive a dividend of $2, and buy one more share for $47.00. At the end of year 2, you receive total dividends of $4 (e., $2 for each share), and sell the shares for $55.00 each. What is the time-weighted return on your investment? (Round your answer to 2 decimal places. Do not round intermediate calculations.) Return 1%
- You buy a share of The Ludwig Corporation stock for $20.20. You expect it to pay dividends of $1.03, $1.1103, and $1.1969 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $25.31 at the end of 3 years. Calculate the growth rate in dividends. Round your answer to two decimal places. % Calculate the expected dividend yield. Round your answer to two decimal places.You are considering acquiring a common stock that you would like to hold for one year. You expect to receive both $0.75 in dividends and $16 from the sale of the stock at the end of the year. The maximum price you would pay for the stock today is _____ if you wanted to earn a 12% return. A. $23.91 B. $26.52 C. $27.50 D. $14.96 E. None of the options are correct.You purchase 100 shares of stock for $25 a share. The stock pays a $2 per share dividend at year-end. What is the rate of return on your investment if the end-of-year stock price is (i) $23; (ii) $25; (iii) $26? What is your real (inflation-adjusted) rate of return if the inflation rate is 5%? (i) $23 (ii) $25 (iii) $26
- Suppose the current price of a stock is $50 per share. You expected to earn a 10% return on the stock if you buy it at the current market price and hold it for one year (right after you receive the dividend for the year). The stock is expected to pay a dividend of $2.5 per share, what do you expect the stock price to be one year from now? • Suppose the current price of a stock is $50 per share. You expected to earn a 10% return on the stock if you buy it at the current market price and hold it for one year (right after you receive the dividend for the year). The stock one year from now is expected to be $53, how much dividend do you expect to receive during the year .If you originally bought a share of stock for $27, and in one year it paid a dividend of $4 and now costs $33. You sell the stock today for $33, what is your percentage return? (answer in percent, but without the percent sign, e.g. "8.25" is 8.25%)You purchase 100 shares of stock for $25 a share. The stock pays a $3 per share dividend at year-end. a. What is the rate of return on your investment if the end-of-year stock price is (i) $22; (ii) $25; (iii) $26? b. What is your real (inflation-adjusted) rate of return if the inflation rate is 2%?