Question
Question 1 According to the Dividend Discount Model, which of the following is NOT an appropriate expression of P3, the value of a stock at
Question 1
According to the Dividend Discount Model, which of the following is NOT an appropriate expression of P3, the value of a stock at the end-of-year 3?
Select one:
a.P3= D1/(1+R) +D2/(1+R)2+D3/(1+R)3
b.P3= D4/(1+R) +D5/(1+R)2+(P6+D6)/(1+R)3
c.P3= (D4+P4)/(1+R)
d.P3= D4/(1+R) +D5/(1+R)2+....+(PN+DN)/(1+R)N
Question2
An analyst made forecasts of Stock A' dividend payment and price for next three years as:
D1= $1, D2=$1.2, D3=$1.44 ; P1=$26.35, P2=$27.26, P3=$28.
The required return for the stock is 8%. What is the intrinsic value of the stock today (P0)?
Select one:
a.$26.14
b.$25.32
c.$25.91
Question3
You purchased 100 shares of Stock X at $25 per share last year, and received $2 dividend per share and sold the stock today for $28 per share.
What is your one year HPR?
Select one:
a.15%
b.20%
c.21%
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