Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A stock index ETF is traded for $ 80 per share. Each share of ETF will pay a dividend of $ 4 in one year.
A stock index ETF is traded for $ 80 per share. Each share of ETF will pay a dividend of $ 4 in one year. This dividend is expected to increase by 3% every year forever. If you are planning to buy this ETF for an investment trust and to hold it forever, what is the IRR of buying this stock?
3% | ||
15% | ||
8% | ||
5% |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started