Q1.You purchased one share of Footwear Inc. common stock for $30 today. If the stock pays a
Question:
Q1.You purchased one share of Footwear Inc. common stock for $30 today. If the stock pays a dividend of $6.50 in one year, and sells for $32.50 at that time, what will
the dividend yield, growth rate, and total rate of return be for the year?
Q2.
Phosphorus Technologies 15-year, $1,000 par value bonds pay 5.5 percent interest annually. The market price of the bonds is $1,085, and your required rate of return is
7 percent.
Q2.1 Compute the bond’s expected rate of return.
Q2.2 Determine the value of the bond to you given your required rate of return.
Q2.3 Should you purchase the bond?
Q3.
3.1What is meant by the investor´s required rate of return?
Q3.3 How can the riskiness of an asset be measured?
Q3.3How should the proposed measurement of risk be interpreted?
Expert Answer:
A1 The dividend yield is calculated as the annual dividend payment divided by the initial stock price or 650 30 02167 or 2167 The growth rate is calcu... View the full answer
