Dingo Corp is planning to pay out an annual dividend of $7 in perpetuity starting 8 years from now. If the market requires a return of 5.2% compounded quarterly on this investment, how much would a share of Dingo Corp cost today? O a. None of the options is correct O b. $94.40 Oc. $132.02 Od. $91.95 Oe. $87.32
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- How much would you be prepared to pay for a share in two years' time when it begins to pay a $0.17 dividend each year and is currently priced at $3? Assume the required rate of return is 8.5% p.a.How much would you be prepared to pay for a share in 3 years’ time that pays a $3.51 dividend each year constantly ? Assume the required rate of return is expected to remain constant at 5.17 per cent per year. Round your final answer to 2 decimal places. E.g. if the final value is $12345.8342, please type 12345.83 in the answer box (do not type the dollar sign).Hastings Corporation is interested in acquiring Visscher Corporation. Assume that the riskfreerate of interest is 4%, and the market risk premium is 5%. Visscher currently expects to pay a year-end dividend of $1.99 a share (D1 =$1.99). Visscher’s dividend is expected to grow at a constant rate of 5% a year, and its betais 0.8. What is the current price of Visscher’s stock?
- 7.A common share of Blotto Beer very recently paid an annual dividend (D0) of $3.17. If the dividend is expected to grow at a constant annual rate of 4.1% and investor's required rate return is 10.1%, what is the intrinsic value (theoretical market price) of a share of Blotto? Question 7 options: a) $34.67 b) $55.00 c) $50.00 d) $52.00Suppose the stock of Company J pays no dividends and has a current price of $90.00. The forward price for delivery in 1 year is $93.60, and the effective annual interest rate is 4%. What would be the profit on a short forward position if the stock price is $109.80 when the forward contract expires? a. $16.20 b $3.60 c $-16.20 d $19.80 e $-19.80Harrison Corporation is interested in acquiring Van Buren Corporation Assume that the risk-free rate of interest is 5%, and the market risk premium is 6% Required 71 Van Buren currently expects to pay a year-end dividend of R2 00 per share (Di = 2 00) Van Buren's dividend is expected to grow at a constant rate of 5% per year, and its beta is 0 9 What is the current price of Van Buren's stock? 72 Harrson estimates that if it acquires Van Buren, the year-end dividend will remain at R2 00 per share, however, synergies will enable the dividend to grow at a constant rate of 7% a year (instead of the current 5%) Harrison also plans to increase the debt ratio of what would be its Van Buren subsidiary, the effect of this would be to raise Van Buren's beta to 11 What is the per-share value of Van Buren to Harrison Corporation? 73 On the basıs of your answers to 7 1 and 72, d Harnson were to acquire Van Buren, what would be the range of possible prces it could bıd for each share of Van Buren…
- Suppose you have $21,000 to invest. You're considering Miller-Moore Equine Enterprises (MMEE), which is currently selling for $70 per share. You also notice that a call option with a $70 strike price and six months to maturity is available. The premium is $3.5. MMEE pays no dividends. What is your annualized return from these two investments if, in six months, MMEE is selling for $77 per share? What about $66 per share?- Note: A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. > Answer is complete but not entirely correct. Annualized Return Option $77 per share $66 per share Stock 21.00 % -11.09 % 300.00 % -100.00 %S Suppose you have $30,000 to invest. You're considering Miller-Moore Equine Enterprises (MMEE), which is currently selling for $50 per share. You also notice that a call option with a $50 strike price and six months to maturity is available. The premium is $4. MMEE pays no dividends. What is your annualized return from these two investments if, in six months, MMEE is selling for $56 per share? What about $46 per share?- Note: A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. $56 per share $46 per share Annualized Return Option Stock % % %One of the options is Delta Airlines. They have paid an annual divendend of $3.98 for the past 25 years and we expect them to continue this indefinetly. Assuming the market requires a(n) 12.0% return Delta, what is the value of a share of stock? (Answer with 2 decimals.) And what if we assumed they would start increasing their divendend by 2.5% per year? What would be a fair price in that scenario? (Answer with 2 decimals.)
- Suppose you have $60,000 to invest. You're considering Miller-Moore Equine Enterprises (MMEE), which is currently selling for $100 per share. You also notice that a call option with a strike price of $100 and six months to maturity is available. The premium is $5. MMEE pays no dividends. What is your annualized return from these two investments if, in six months, MMEE is selling for $106 per share? What about $96 per share?Suppose XYZ stock pays no dividends and has a current price of $50. The forward price for delivery in 1 year is $55. Suppose the 1-year eective annual interest rate is 10%. (a) Graph the payo and prot diagrams for a forward contract on XYZ stock with a forward price of $55. (b) Is there any advantage to investing in the stock or the forward contract? Why? (c) Suppose XYZ paid a dividend of $2 per year and everything else stayed the same. Now is there any advantage to investing in the stock or the forward contract? Why?Suppose that you are willing to pay $450.33 today for a share of stock which you expect to sell at the end of one year for $500.25. If you require an annual rate of return of 15 percent, what should be the estimate of the amount of the annual dividend which you expect to receive by the end of Year 1 prior to the sale of the stock? Assume that the estimated return equals the required rate of return. Options: a. $17.63 b. $1.60 c. $10.99 d. $19.25 e. $3.60