Question 1. The DDM model assumes that the value of a share of stock equals the...

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Question 1. The DDM model assumes that the value of a share ofstock equals the present value of its expected future cashreceipts. The elements of the computation are: Dividend one yearhence: D(1) = €3, Stock price one year hence: P(1) = €24 and Annualrisk adjusted discount rate:1 k = 12.5%.
Question 2. The Blue Dog Company has common stock outstandingthat has a current price of $20 per share and a $0.5 dividend. BlueDog’s dividends are expected to grow at a rate of 3% per year,forever. The expected risk-free rate of interest is 2.5%, whereasthe expected market premium is 5%. The beta on Blue Dog’s stock is1.2 . a) What is the cost of equity for Blue Dog using the dividendvaluation model?, b) What is the cost of equity for Blue Dog usingthe capital asset pricing model?
Question 3. Problem: Suppose you have the following about abond: Price = $1,494.96 Par Value = $1,000.00, Coupon Rate =10%,N=14. Please find the YTM.
Question 4. Find the price of a 8% coupon bond (semi-annualpayments) with a par value of $1,000 and a 15-year maturity if themarket rate on similar bonds is 10%.

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Question 1 The DDM model assumes that the value of a share of stock equals the present value of its expected future cash receipts The elements of the computation are Dividend one year hence D1 3 Stock price one year hence P1 24 and Annual risk adjusted discount rate1 k 125 FALSE See Answer

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Question 1. The DDM model assumes that the value of a share ofstock equals the present value of its expected future cashreceipts. The elements of the computation are: Dividend one yearhence: D(1) = €3, Stock price one year hence: P(1) = €24 and Annualrisk adjusted discount rate:1 k = 12.5%.Question 2. The Blue Dog Company has common stock outstandingthat has a current price of $20 per share and a $0.5 dividend. BlueDog’s dividends are expected to grow at a rate of 3% per year,forever. The expected risk-free rate of interest is 2.5%, whereasthe expected market premium is 5%. The beta on Blue Dog’s stock is1.2 . a) What is the cost of equity for Blue Dog using the dividendvaluation model?, b) What is the cost of equity for Blue Dog usingthe capital asset pricing model?Question 3. Problem: Suppose you have the following about abond: Price = $1,494.96 Par Value = $1,000.00, Coupon Rate =10%,N=14. Please find the YTM.Question 4. Find the price of a 8% coupon bond (semi-annualpayments) with a par value of $1,000 and a 15-year maturity if themarket rate on similar bonds is 10%.