Question
Please really confused on figuring out these problems. need some help with work Problem 3 Delayed dividends Suppose that a stock is not expected to
Please really confused on figuring out these problems. need some help with work
Problem 3 Delayed dividends
Suppose that a stock is not expected to pay any dividend for the next 5 years. Starting from year 6, the stock will pay a dividend of $6 each year. The rate at which we discount the payments is 3%.
A. $6.00 B. $150.00 C. $172.52 D. $194.25 E. None of the given alternatives
Problem 4 Periodic dividends but not consecutive
A corporation pays a dividend per share of 10 every four years. The last dividend was paid two years ago and the next dividend is going to be paid in two years. The rate at which we discount the payments is 5%, what is the shares price today?
A. $381.75 B. $420.88 C. $575.44 D. $621.20 E. None of the given alternatives
Problem 5 Dividends with payment frequency different of a year
Suppose that a share pays a dividend of $6 each quarter and the interest rate is 6% APR. If the next dividend will be paid in 3 months, calculate the price of a share.
A. $100.00 B. $400.00 C. $600.00 D. $1200.00
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E. None of the given alternatives
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