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Business, 22.12.2020 03:10 Deuce3898

Stock A pays a dividend of $3 per share every year. The discount rate is 10% and the return on equity is 25%. 1) If you want to buy stock A at year 1 and hold it for 5 years, what is the price you have to pay at year 1?
A) $30.
B) $33.
C) $36.
D) $42.
E) None of the above.
2) What is the payout ratio for this stock?
A) 1.
B) 1.5.
C) 0.4.
D) 0.
E) None of the above.
3) What is the earning per share at year 2?
A) $5.
B) $4.
C) $3.
D) Not enough info.
E) None of the above.
4) If you want to buy stock A at year 1 and hold it for 5 years, what is the price you have to pay at year 1 (p1)?
a) $30.
b) $33.
c) $36.
d) $40.
e) none of the above.

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Answers: 3

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