You are considering buying a share of stock which you expect to pay a dividend...
80.2K
Verified Solution
Link Copied!
Question
Accounting
You are considering buying a share of stock which you expect to pay a dividend at the end of each of the next five years. As soon as you receive the last dividend, you plan to sell the stock. The dividends and expected selling price are shown in the table below. Use the required return in the table as your discount rate
7.09% Required return Year 0 1 2 3 4 5 Expected Selling Price $147.00 Dividend $4.56 $4.56 $4.56 $4.56 $4.56 Total Cash Flow $4.56 $4.56 $4.56 $4.56 $151.56 inflow inflow inflow inflow inflow
What is this investment worth in today's money (i.e., what is the sum of the present values of eachtotal cash flow)?
Enter your answer as a number with four decimal places but without the currency symbol, like this: 90.1234
You are considering buying a share of stock which you expect to pay a dividend at the end of each of the next five years. As soon as you receive the last dividend, you plan to sell the stock. The dividends and expected selling price are shown in the table below. Use the required return in the table as your discount rate
| 7.09% | Required return | |||||
| Year | 0 | 1 | 2 | 3 | 4 | 5 |
| Expected Selling Price | $147.00 | |||||
| Dividend | $4.56 | $4.56 | $4.56 | $4.56 | $4.56 | |
| Total Cash Flow | $4.56 | $4.56 | $4.56 | $4.56 | $151.56 | |
| inflow | inflow | inflow | inflow | inflow |
What is this investment worth in today's money (i.e., what is the sum of the present values of eachtotal cash flow)?
Enter your answer as a number with four decimal places but without the currency symbol, like this: 90.1234
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.