Question
Q 1 An investor holds the stock of Amanda Financials and expects to receive a dividend of $4.00 per share at the end of the
Q 1
An investor holds the stock of Amanda Financials and expects to receive a dividend of $4.00 per share at the end of the year. Stock analysts recently predicted that the banks dividends will grow at approximately 2.5 percent a year indefinitely into the future. If this is true, and if the appropriate risk-adjusted cost of capital (discount rate) for the bank is 12 percent, what should be the current price per share of Amanda Financials stock?
Answer: $__________ (two decimal points)
Q2
NY County Bank reports total operating revenues of $165 million, with total operating expenses of $132 million, and owes taxes of $5.6 million. It has total assets of $1.05 billion and total liabilities of $950 million. What is the banks ROE?
Answer: ___________% (two decimal points)
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