Question
For the following 2 questions: You purchase 4500 shares of stock at a price of $11 per share. One year later, the shares are selling
For the following 2 questions: You purchase 4500 shares of stock at a price of $11 per share. One year later, the shares are selling for $16 per share. In addition, a dividend of $2 per share is paid at the end of each year.
34) What is the capital gains yield for the investment?
A) 8.5%
B) 10.0%
C) 31.5%
D) 33.0%
E) 45.5%
35) What is the dividend yield for the investment?
A) 2.5%
B) 13.3%
C) 16.5%
D) 18.2%
36) Company J and Company K each recently reported the same earnings per share (EPS). Company J's stock, however, trades at a higher price. Which of the following statements is most correct?
A) Company J must have a higher P/E ratio.
B) Company J must have a higher market to book ratio.
C) Company J must be riskier.
D) Company J must have fewer growth opportunities.
E) All of the statements above are correct.
37) Calculate the NPV and IRR of the following project using a discount rate of 11%:
Yr 0 = $50
Yr 1 = $80
Yr 2 = $400
Yr 3 = $300
Yr 4 = $500
Yr 5 = $90000
$70,173; 16%
$70,173; 441%
$50,765; 18%
$54,306; 442%
The answers ar bold but i need to know how to get the answers
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