Question: Please really confused on figuring out these problems. need some help with work Problem 3 Delayed dividends Suppose that a stock is not expected to

Please really confused on figuring out these problems. need some help with work

Problem 3 Delayed dividends  

Suppose that a stock is not expected to pay any dividend for the next 5 years. Starting from year 6, the stock will pay a dividend of $6 each year. The rate at which we discount the payments is 3%.

A. $6.00 B. $150.00 C. $172.52 D. $194.25 E. None of the given alternatives 

Problem 4 Periodic dividends but not consecutive

A corporation pays a dividend per share of 10 every four years. The last dividend was paid two years ago and the next dividend is going to be paid in two years. The rate at which we discount the payments is 5%, what is the shares price today?

A. $381.75 B. $420.88 C. $575.44 D. $621.20 E. None of the given alternatives 

Problem 5 Dividends with payment frequency different of a year

Suppose that a share pays a dividend of $6 each quarter and the interest rate is 6% APR. If the next dividend will be paid in 3 months, calculate the price of a share.

A. $100.00 B. $400.00 C. $600.00 D. $1200.00 

1

E. None of the given alternatives 

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!