Question
**Please Answer Question #9. Question #8 is included for #9 calculations.** 8. Now it is 2020, the whole market is struggling. Spahr cosmetics decided to
**Please Answer Question #9. Question #8 is included for #9 calculations.**
8. Now it is 2020, the whole market is struggling. Spahr cosmetics decided to adopt a constant dividends policy. The management announced that it is going to pay $5 annual dividends indefinitely. What is the stock price if the required rate of return is 12%?
- $ 40.68
- $ 83.33
- $ 41.67
- $ 35.43
9. If you were to buy Spahr Cosmetics stock now at the price you calculated at question #8 and sell it for $50 after receiving the dividend one year from now (dividends is $5 per share as indicated in the previous question), what would be your holding period return (HPR)?
- 35%
- -34%
- 32%
- 55%
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Real Estate Finance And Investments
Authors: William Brueggeman, Jeffrey Fisher
13th Edition
0073524719, 9780073524719
