1/ On December 31, 20X2, the shares of ABC, Inc., closed at $20. The company subsequently paid
a year-end dividend in each of the years 20X3 through 20X7 as follows:
20X3: $1.00; 20X4: $1.00; 20X5: $1.10; 20X6: $1.25; 20X7: $1.25
Suppose you had purchased a share of ABC stock on December 31, 20X2. Find the price at which
you must sell your share at 20X7 year-end in order to realize an annual compounded total rate of
return of 10 percent on your initial investment (before commissions and taxes).
Answer:
2/ Investors require a 10 percent per year return on the stock of the Take-Two Corporation, which
anticipates a nonconstant growth pattern for dividends. The company paid a $2 per share dividend.
The dividend is expected to grow by 15 percent per year until the end of year 4 (i.e., for the next
3 years) and 7 percent thereafter.
(a) Project dividends for years 1 through 4.
(b) Compute the present value of the dividends in part (a).
(c) Project the dividend for the fifth year (D5).
(d) Find the present value of all future dividends beginning with the fifth year’s dividend. The
present value you find will be at the end of the fourth year. Use the formula P4=D5 /(r - g).
(e) Discount back the value found in part (d) for 4 years at 10 percent.
(f) Determine the value of the stock P0
Answer:
3/ The risk-free rate is 6 percent, the required rate of return on the market is 12 percent, and stock
A has a beta coefficient of 1.2. If the dividend expected during the coming year is $2 and the
growth rate of dividends and earnings is 7 percent, at what price should stock A sell?
Answer:
4/ Ewald Company’s current stock price is $36, and its last dividend was $2.40. In view of Ewald’s
strong financial position and its consequent low risk, its required rate of return is only 12%. If
dividends are expected to grow at a constant rate g in the future, and if rs is expected to remain at
12%, then what is Ewald’s expected stock price 5 years from now?
Answer:
5/ Snyder Computer Chips Inc. is experiencing a period of rapid growth. Earnings and dividends
are expected to grow at a rate of 15% during the next 2 years, at 13% in the third year, and at a
constant rate of 6% thereafter. Snyder’s last dividend was $1.15, and the required rate of return on
the stock is 12%. a. Calculate the value of the stock today. b. Calculate ^ P1 and ^ P2. c. Calculate
the dividend yield and capital gains yield for Years 1, 2, and 3.
Answer:
Đề thi:
1. Năm hoặc 10 năm sau, lãi suất cố định -> mất bao nhiêu năm để đạt đc số tiền đó
2. Mua trả góp 1 món gì đó -> tính mức trả góp hàng tháng, lãi suất thực tế (ETF) mà ngta tính
cho mình là bao nhiêu
3. Bond -> tính bond yeild, capital gain or loss yeild
4. 2 câu Áp dụng CAMP, expected rate of return
5. Bond -> bond trả lãi ntn: matutiry, semi, annual, quater,…
6.