QUESTION 13 Cochran owns Investment A and 1 share of stock B. The total value of his holdings is $490. Stock B is expected to pay an annual dividend of 515.60 each year forever, the stocks expected return is 12.40 percent per year, and its next dividend is expected in 1 year. Investment A has an expected return of X and is expected to pay 576.00 per year for afinite number of years such that its first annual payment is expected later today and its last annual payment is expected in 7 years from today. What is the expected return for investment A? a. 18.18 (plus or minus .03 percentage points) b. 14.93 (plus or minus .03 percentage points) 13.00 (plus or minus .03 percentage points) d. 10.48 (plus or minus .03 percentage points) e. None of the above is within.03 percentage points of the correct answer Cochran owns Investment A and 1 share of stock B. The total value of his holdings is $490. Stock B is expected to pay an annual dividend of $15.60 each year forever, the stock's expected return is 12.40 percent per year, and its next dividend is expected in 1 year. Investment A has an expected return of X and is expected to pay $76.00 per year for a finite number of years such that its first annual payment is expected later today and its last annual payment is expected in 7 years from today. What is the expected return for investment A? a. 18.18 (plus or minus .03 percentage points) b. 14.93 (plus or minus .03 percentage points) c. 13.04% (plus or minus .03 percentage points) d. 10.48% (plus or minus .03 percintage points) e. None of the above is within .03 percentage points of the correct answer QUESTION 13 Cochran owns Investment A and 1 share of stock B. The total value of his holdings is $490. Stock B is expected to pay an annual dividend of 515.60 each year forever, the stocks expected return is 12.40 percent per year, and its next dividend is expected in 1 year. Investment A has an expected return of X and is expected to pay 576.00 per year for afinite number of years such that its first annual payment is expected later today and its last annual payment is expected in 7 years from today. What is the expected return for investment A? a. 18.18 (plus or minus .03 percentage points) b. 14.93 (plus or minus .03 percentage points) 13.00 (plus or minus .03 percentage points) d. 10.48 (plus or minus .03 percentage points) e. None of the above is within.03 percentage points of the correct answer Cochran owns Investment A and 1 share of stock B. The total value of his holdings is $490. Stock B is expected to pay an annual dividend of $15.60 each year forever, the stock's expected return is 12.40 percent per year, and its next dividend is expected in 1 year. Investment A has an expected return of X and is expected to pay $76.00 per year for a finite number of years such that its first annual payment is expected later today and its last annual payment is expected in 7 years from today. What is the expected return for investment A? a. 18.18 (plus or minus .03 percentage points) b. 14.93 (plus or minus .03 percentage points) c. 13.04% (plus or minus .03 percentage points) d. 10.48% (plus or minus .03 percintage points) e. None of the above is within .03 percentage points of the correct
