Alcoa stock is currently trading on the market at $25 per share. It recently paid...
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Accounting
Alcoa stock is currently trading on the market at $25 per share. It recently paid its annual dividend of $1, has a
dividend growth rate of 5% and required rate of return of 11%. Value this stock and is it over/undervalued.
a. 17.50 Overvalued
b. 19.52 Overvalued
c. 25.00 Undervalued
d 26.50 Undervalued
An investment offers a perpetual cash flow of $55,000 per year. The return you require is 8%.
What is the value of this investment (perpetuity)
a. 464,250.00
b. 504,250.00
c. 562,500.00
d 687,500.00
A $10,000 bond has twelve years to maturity and a coupon rate of 4.35% (semi-annual). Rates on current bonds of similar risk are 4.84%. Value this bond
a. 9,557.92
b. 9,798.51
c. 9,843.22
d. 9,998.51
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