Question
Seema purchased stock in a new social media company for $40 per share shortly after the stocks IPO. The stock had been heavily publicized on
Seema purchased stock in a new social media company for $40 per share shortly after the stocks IPO. The stock had been heavily publicized on the internet. Over the next three years, the stock price declined by 15% each year. What is the companys stock price after three years? Hint modify future value formula FV = PV(1 + i)^n by changing the signage to depict a decline in the value of the stock.
Mitali bought a stock a year ago for $53 per share. She received dividends on the stock amounting to $60 and sold the stock today for $48 per share. What is Mitalis return on the stock? R = (Sales price - Purchase price) + D/Sales price
ABC Company intends to pay a $2 dividend per share next year and you expect dividend to increase by 5% per ayear in perpetuity. Your required rate of return on ABC Company is 12%. Currently, ABC Company stock is trading at $15 per share. a) Calculate the value of a share based on Gordon Growth (stabel) Method b) Is the current market price of ABC Vp[anys share over or under valued? V = D1 / (k-g)
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