P7-1 Stock Index Performance On March 5, 2013, the Dow Jones Industrial Average set a new high. The index closed at 14,253.77, which was up 125.95 that day. What was the return (in percent) of the stock market that day? P7-4 Expected Return Ecolap Inc. (ECL) recently paid a $0.46 dividend. The dividend is expected to grow at a 14.5 percent rate. At a current stock price of $44.12, what is the return shareholders are expecting? First convert Do to Di then use equation: Expected return g P7-2 Buying Stock with a Market Order You would like to buy shares of Sirius Satellite Radio (SIRI). The current ask and bid quotes are $3.96 and $3.93 respectively. You place a market buy-order for 500 shares that executes at these quoted prices. How much money did it cost to buy these shares? P7-5 Variable Growth A fast growing firm recently paid a dividend of $0.40 per share The dividend is expected to increase at a 25 percent rate for the next 4 years. Afterwards, a more stable 11 percent growth rate can be assumed. If a 12.5 percent discount rate is appropriate for this stock, what is its value? P7-3 Value a Constant Growth Stock Financial analysts forecast Safeco Corp. (SAF) growth for the future to be 8 percent. Safeco's recent dividend was $1.20. What is the value of Safeco stock when the required return is 12 percent? Use equation: Use equation: lHi (1+i Constant growth model(g)