Question
47. KO stock is trading at $55 per share the day before the ex-dividend date. KO is going to pay a $2 dividend. Where would
47.
KO stock is trading at $55 per share the day before the ex-dividend date. KO is going to pay a $2 dividend. Where would you expect KO stock to trade on the ex-dividend date, if nothing else changes?
| a. | $55 | |
| b. | $57 | |
| c. | $53 | |
| d. | $110
|
part b 48
| Year | Cash Flow |
| 0 | -12,000 |
| 1 | 4000 |
| 2 | 5000 |
| 3 | 6000 |
| 4 | 6000 |
Given the cash flows in the table above, what is the projects Payback Period (assume cash flows are received evenly during the year)?
| a. | 1.4 years | |
| b. | 2.2 years | |
| c. | 2.5 years | |
| d. | 4 years |
part c (55)
ToysToys Corporation wants to borrow $500,000 for one month. It uses its inventory as collateral for a 16% (APR compounded monthly) loan, under a warehouse arrangement where the warehouse fee is $14,000, paid at the end of the month. What is the EAR of this loan for ToysToys?
| a. | 4.1% | |
| b. | 15.4% | |
| c. | 17.2% | |
| d. | 62.6% |
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