A prestigious investment bank designed a new security that pays a quarterly dividend of $1.45 in perpetuity.
Question:
A prestigious investment bank designed a new security that pays a quarterly dividend of $1.45 in perpetuity. The first dividend occurs one quarter from today. What is the price of the security if the annual percentage rate is 4.9 percent, compounded quarterly?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 87% (8 reviews)
The dividend payments are made quarterly so we must use the quarterly interest ...View the full answer
Answered By
OTIENO OBADO
I have a vast experience in teaching, mentoring and tutoring. I handle student concerns diligently and my academic background is undeniably aesthetic
4.30+
3+ Reviews
10+ Question Solved
Related Book For
Corporate Finance Core Principles And Applications
ISBN: 9781260571127
6th Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
Question Posted:
Students also viewed these Business questions
-
Drew Financial Associates currently pays a quarterly dividend of 50 cents per share. This quarters dividend will be paid to stockholders of record on Friday, February 22, 2004. Drew has 200,000...
-
Suppose a preferred stock pays a quarterly dividend of $2 a share. The next dividend comes in exactly one-fourth of a year. If the prince of the stock is $80, what is its current market price? What...
-
Suppose a preferred stock pays a quarterly dividend of $2 per share. The next dividend comes in exactly one-fourth of a year. If the price of the stock is $80, what is the effective annual rate of...
-
Suppose \(x\) is a linked-list Node. What is the effect of the following code fragment? \[x \cdot \text { next }=x \cdot \text { next } . \text { next; }\]
-
Consider the following probability distribution: a. Find . b. For a random sample of n = 3 observations from this distribution, find the sampling distribution of the sample mean. c. Find the sampling...
-
Use the following adjusted year-end trial balance at December 31, 2018, of Wilson Trucking Company to prepare the (1) income statement for the year ended December 31, 2018, and (2) statement of...
-
An experiment was conducted to determine the effects of certain alloying elements on the ductility of a metal, and the following results were obtained: Perform an appropriate analysis of variance and...
-
Chlorobenzene (C 6 H 5 C1), an important solvent and intermediate in the production of many other chemicals, is produced by bubbling chlorine gas through liquid benzene in the presence of ferric...
-
Write a Widget class according to the UML Diagram. WidgetFactory - numWidgets : int - WIDGETS_PER_HOUR: double = 10.0 |- NUM_SHIFTS: int = 2 - HOURS_PER_SHIFT: int = 8 + setNumWidgets(n: int): void...
-
There has been a lot of debate about whether the existence of a marketing department can actually be harmful to services companies because it absolves everybody else of marketing responsibilities....
-
Mark Weinstein has been working on an advanced technology in laser eye surgery. His technology will be available in the near term. He anticipates his first annual cash flow from the technology to be...
-
What is the value today of an annuity of $7,200 per year, with the first cash flow received three years from today and the last one received 25 years from today? Use a discount rate of 7.4 percent.
-
Consider each of the following transactions separately from every other transaction: a. Issuance of 57,000 common shares at $13. b. Purchase of 1,800 treasury shares at $8 per share. c. Issuance of a...
-
Which is the negation of the statement, "The car and the shirt are both blue"? (a) Neither the car nor the shirt is blue. (b) The car is not blue and/or the shirt is not blue.
-
Restate as an implication: "A triangle is a polygon."
-
Refer to the file lung.csv. a. Construct a histogram for the values of FEV1. b. Is the histogram symmetric, skewed to the left, or skewed to the right? c. Construct a boxplot for the values of FEV1....
-
(a) Entity X prepares financial statements to 31 May each year. On 31 May 2007, the entity acquired land for EUR 800,000. This land was revalued to EUR 900,000 on 31 May 2008 and to EUR 750,000 on 31...
-
A fair die is rolled twice. Let \(A\) be the event that the number on the first die is odd, let \(B\) be the event that the number on the second die is odd, and let \(C\) be the event that the sum of...
-
The postclosing trial balance for the City of Fort Collins governmental funds at June 30, 2016, shows the following ledger account balances: ADDITIONAL INFORMATION 1. During the year, Fort Collins...
-
The ultimate goal of Google, Bing, and other consumer search engines is to provide users with search listings that contain useful information on the topic of their search. What recommendations would...
-
Inventory Types what are the different inventory types? How do the types differ? Why are some types said to have dependent demand whereas other types are said to have independent demand?
-
Just-in-Time Inventory if a company moves to a JIT inventory management system, what will happen to inventory turnover? What will happen to total asset turnover? What will happen to return on equity...
-
Inventory Costs if a companys inventory carrying costs are $5 million per year and its fixed order costs are $8 million per year, do you think the firm keeps too much inventory on hand or too little...
-
6.(5pts) A total charge Q is distributed uniformly over a ring of radius R. We found an expression for the value of the electric field on the axis of the ring, E(x), a distance x from the center of...
-
7. An electric charge Q is distributed uniformly throughout a nonconducting sphere of radius Ro with a uniform density, p = Q/{(4/3)R}. Use Gauss's Law to determine (a) (5pts) the electric field,...
-
A child is swinging a 330-g ball at the end of a 66.0-cm-long string in a vertical circle. The string can withstand a tension of 11.0 N before breaking. (a) What is the tension in the string when the...
Study smarter with the SolutionInn App