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I Quantitative Problems Ebay, Inc. went public in September of 1998. The following information on shares outstanding was listed in the final prospectus filed with

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I Quantitative Problems Ebay, Inc. went public in September of 1998. The following information on shares outstanding was listed in the final prospectus filed with the SEC!. In the IPO, the Ebay issued 3,500,000 new shares. The initial price to the public was $18.00 per share. The final first-day closing price was $44.88. 1. Suppose you want to buy a stock, which will pay $1 dividend in next year, price of this stock will be $55 in next year; how much you are willing to pay for this stock today, if your required rate for investment is 14%? Solution

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