Get Custom Essay on Please help with the finance hw
Let Our Team of Pofessional Writers Take Care of Your Paper.
Session 7 Questions
#1- You are planning to buy 100 shares preferred stock, either Stock A or Stock B. Stock A pays an annual dividend of $4.50 and has a market price of $35. Stock B pays an annual dividend of $4.25 and has a market price of $36. If your required rate of return is 12%, which stock should you buy? HINT: Calculate the appropriate metric and decide.
I would choose stock A as it has a lower selling price of $35.00, pays a higher dividend or $4.50 and the required rate of return is this same.
#2- You intend to buy Marigo common stock at $100 per share, hold it for one year, and sell it after receiving a cash dividend of $6. How much will the stock price have to appreciate for you to achieve a required rate of return of 11%?
D1 = 6, P0=100 (50), Ks = 11% (15%)
SO we have P0 = D1/(Ks-g)
or g = Ks – D1/P0 = 11% – 6/100 = 5%
So P1 = D1*(1+g)/(Ks-g) = 6*(1+5%)/(11%-5%) = $105.00
So Stock price should be $105.00 for giving a 11% return.
#3- You are considering three investments.
(You are NOT expected to do Excel calculations on this assignment. Therefore, the Excel results are shown below. Explain the inputs, output, and the interpretation of the output.)
Using the panel of Excel data on the next page and the Stocks Support Template 2015.xlsx that shows the formulas in the cells, answer these questions:
#4- Which is better, a $40 stock or a $4 stock? Explain very briefly.
#5- Show the equation/formula you would use to calculate the average annual rate of return on a stock you bought on January 27, 2002 for $100 and sold on January 27, 2012 for $150? Assume that dividend payout was zero.
#6- Construct a table to succinctly compare and contrast the building blocks of stock and bond valuation.
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
Best Quality Essays has stood as the world’s leading custom essay writing services providers. Once you enter all the details in the order form under the place order button, the rest is up to us.
At Best Quality Essays, we prioritize on all aspects that bring about a good grade such as impeccable grammar, proper structure, zero-plagiarism and conformance to guidelines. Our experienced team of writers will help you completed your essays and other assignments.
Admission and Business Papers
Be assured that you’ll definitely get accepted to the Master’s level program at any university once you enter all the details in the order form. We won’t leave you here; we will also help you secure a good position in your aspired workplace by creating an outstanding resume or portfolio once you place an order.
Editing and Proofreading
Our skilled editing and writing team will help you restructure you paper, paraphrase, correct grammar and replace plagiarized sections on your paper just on time. The service is geared toward eliminating any mistakes and rather enhancing better quality.
We have writers in almost all fields including the most technical fields. You don’t have to worry about the complexity of your paper. Simply enter as much details as possible in the place order section.