Question
Maritza has one share of stock and one bond. The total value of the two securities is 1,077 dollars. The bond has a YTM of
Maritza has one share of stock and one bond. The total value of the two securities is 1,077 dollars. The bond has a YTM of 12.98 percent, a coupon rate of 11.92 percent, and a face value of 1,000 dollars; pays semi-annual coupons with the next one expected in 6 months; and matures in 18 years. The stock pays annual dividends and the next dividend is expected to be 9.72 dollars and paid in one year. The expected return for the stock is 19.29 percent. What is the price of the stock expected to be in 1 year?
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The next three annual dividends paid by Oxygen Optimization stock are expected to be 6.27 dollars in one year, 7.11 dollars in two years, and 7.76 dollars in three years. The price of the stock is expected to be 94.98 dollars in two years. The expected annual return for the stock is 10.7 percent. What is the current price of one share of Oxygen Optimization stock?
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