Question
1. Given the information in the table, what is TODAYs price of the stock? Todays Dividend $3.98 Discount Rate 6.00% Growth rate in dividends 0
1. Given the information in the table, what is TODAYs price of the stock?
| Todays Dividend | $3.98 |
| Discount Rate | 6.00% |
| Growth rate in dividends 0 to 1 | 4.00% |
| Growth rate in dividends 1 to 2 | 7.00% |
| Growth rate in dividends 2 to 3 | 3.00% |
| Growth rate in dividends 3 onward | 4.00% |
2.
| Term (years) | Today's Rate |
| 1 | 2.18% |
| 2 | 2.33% |
| 3 | 2.46% |
Based on the expectations hypothesis, what does the market expect the 2 year rate in 1 years to be?
State your answer as a percentage to 2 decimal places (e.g., 4.39)
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Multinational Business Finance
Authors: David Eiteman, Arthur Stonehill, Michael Moffett
15th Global Edition
129227008X, 9781292270081
