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help me please iii. month for 48 HulLIS $14,000 down and a final payment of $14,230 two years from now. 2.50 + 2. An investor
help me please
iii. month for 48 HulLIS $14,000 down and a final payment of $14,230 two years from now. 2.50 + 2. An investor is interested in 3 stocks: Sports Inc, Tiles Inc, and Vacations Inc. The investor requires A6% return per year for each company. They consult an investment adviser who gives the following information on these companies: Sports Inc - investment adviser's report: This firm will pay a dividend or $2.59 next year. I predict this dividend will grow 22.3% pler year. Tiles Inc - investment adviser's report: This firm will pay a dividend of $2 next year. I expect a dividend of $2.50 the year after. Thereafter I expect the dividend will grow at 2% per year Vacations Inc - investment adviser's report: This firm is not currently paying dividends. I predict dividers will start being paid in 4 years, with the dividend starting at $2.79 and growing at 2.5/per year. a) Calculate the price for each of these stocks. b) Consider a second investor who disagrees with the investment advisor's opinion regarding Sports Inc. The second investor expects the firm to pay the dividend of $2.75 next year, but does not believe there will be any growth in this dividend, and this dividend will continue in perpetuity. He feels a price of $50 is fair. What is this investor's required rate of return for Sports Inc.? 2.80Step by Step Solution
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