What is the price you would pay for stock now

Question # 00767733 Posted By: Riley405 Updated on: 06/26/2020 03:58 AM Due on: 07/01/2020
Subject Finance Topic Finance Tutorials:
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Q.1) Jumbuck Exploration has a current stock price of $2.00 and is expected to sell for $2.10 in one year's time, immediately after it pays a dividend of $0.26. Which of the following is closest to Jumbuck Exploration's equity cost of capital?

Q.2) Credenza Industries is expected to pay a dividend of $1.20 at the end of the coming year. It is expected to sell for $62.00 at the end of the year. If its equity cost of capital is 8%, what is the price you would pay for this stock now?

Q.3 Suppose you expect Longs Drug Stores to pay an annual dividend of $.56 per share in the coming year and to trade $45.50 per share at the end of the year. If investments with equivalent risk to Longs' stock have an expected return of 6.80%, what is the most you would pay today for Longs' stock?

Q.4) Coolibah Holdings is expected to pay dividends of $1.20 every six months for the next three years. If Coolibah's equity cost of capital is 16% and its price at the end of the 3 years is expected to be $26.74, how much would you pay for it now?

 

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