Entries by mary WAMBUGU

Assume Microsoft just paid a dividend of $1.56 per share. Your required rate of return is 10%, and the analysis

Assume Microsoft just paid a dividend of $1.56 per share. Your required rate of return is 10%, and the analysis you’ve done tells you that Microsoft should be able to grow its dividend by a rate of 7% per year. What is the most you should be willing to pay for this stock? Now let’s say you go […]

 

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You win the lottery and select the option to receive 20 annual payments of one million dollars

1. You win the lottery and select the option to receive 20 annual payments of one million dollars (an ordinary annuity). If today is January 1, 2018, and the first payment is made January 1, 2019, what will be the value of the remaining payments as of January 2, 2030 if the interest rate is 5%? […]

 

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1. IBM ended trading on 7/18/2017 with a stock price of $154.00, and it’s most recent year of dividend payments

1. IBM ended trading on 7/18/2017 with a stock price of $154.00, and it’s most recent year of dividend payments was $6.00 per share. If dividend payments are expected to grow at a constant annual rate of 5% following last year’s dividend of $6.00, what is the expected annual return of an investment in this stock […]

 

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IBM currently has one bond in the Liabilities section of its Balance Sheet. This 10-year bond with 6 years to maturity and a 5.5% coupon paying semi-annually, has a yield to maturity (NOTE: the cost of this form of debt capital for IBM) of 4.25%. What is the current price of the bond if par value is $1,000?

IBM currently has one bond in the Liabilities section of its Balance Sheet. This 10-year bond with 6 years to maturity and a 5.5% coupon paying semi-annually, has a yield to maturity (NOTE: the cost of this form of debt capital for IBM) of 4.25%. What is the current price of the bond if par value is […]

 

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