Your goal is to hold the stock of TERS Inc. for a year. TERS Inc. will...

Your goal is to hold the stock of TERS Inc. for a year. TERS Inc. will pay a dividend of $1.40 in one year 4 and $1.50 the year after. Your goal is to sell your shares of TERS Inc. at the end of the second year for $25.00. If the discount rate is 10%, then your dividend yield is closest to: A.5.75%

B.6.50%

C.6.25%

D.11.43%

E.12.04%

The correct answer is C, please provide solution

Expert Solution

Dividend Yield = Expected dividend/Current Price

Current stock price is present value of all dividends expected in future.

Dividend Yield = $1.40/$23.17 = 6.04% (Closest to Option C)

jeff jeffy answered 2 years ago

You invest in $200 in the US stock market. If you hold it for one year,...

You invest in $200 in the US stock market. If you hold it for one year, there is a 35% chance that your investment value will increase to $250, a 35% chance it will remain at $200, and a 30% chance it will decrease to $180 What is the mean annual return of the investment? What is the annual return variance? What is the annual return standard deviation?

You want to purchase common stock of ValleyMax Corporation and hold it for 1 year. ValleyMax...

You want to purchase common stock of ValleyMax Corporation and hold it for 1 year. ValleyMax has announced dividends of $1.65 for the next year. Based on your analysis, you expect to sell the stock for $25 per share at the end of the year. What is the maximum price that you would pay for a share today if you wanted to earn a 11% return? $22.52 $24.01 $29.94 $23.72

Choose your career goal. Why decide on a career goal? Does a career goal limit your...

Choose your career goal. Why decide on a career goal? Does a career goal limit your future? Select a college degree or training program (beyond a baccalaureate degree) that best meets your career goal and financial needs.

1) What does it mean to "Diversify" your portfolio? A. To hold more than 1 stock...

1) What does it mean to "Diversify" your portfolio? A. To hold more than 1 stock B. For your stocks to not be all in the same area of the economy C. To have a mix between stocks, mutual funds, or other securities D. A and B 2) What is Capital Preservation? A. To make sure you don't lose your initial investment B. To make sure you keep the gains you make investing C. When companies buy back stock D....

You will function as employees within a finance department of XYZ Inc. Your goal is to...

You will function as employees within a finance department of XYZ Inc. Your goal is to propose changes to the way XYZ manages its money. Currently, the CFO maintains all of XYZ's cash holdings at a local bank. You will propose changes to this policy by developing a portfolio made up of T-Bills, STRIPS, and Bonds that optimizes the return for XYZ under constraint. Suppose XYZ has average monthly cash holdings of $15 million, revenue of $8 million, and expenses...

Citigroup (C) stock has been up and down in the past year. Would buy/hold/ or sell...

Citigroup (C) stock has been up and down in the past year. Would buy/hold/ or sell this stock? Support with ideas analytics. Also state further in depth facts other than analytics to support your reasoning.

Procedure 1. Hold a wood block next to your ear, and have someone hold a ringing...

Procedure 1. Hold a wood block next to your ear, and have someone hold a ringing cellphone next to the block. Note the sound of the telephone through the wood. 2. Hold an empty water bottle next to your ear. Hold the cellphone against the other side of the water bottle, and note the sound of the phone through the air in the bottle. 3. Repeat step 3 with the water bottle filled with water. Analysis: 1. Compare and Contrast...

You hold one share of IBM stock. The current stock price is $56. You are worried...

You hold one share of IBM stock. The current stock price is $56. You are worried that the stock price may decline. Your objective is to get at least $50 from the stock at the end of one year. Assume the volatility of IBM stock (sigma) is 30% and the risk-free rate is 8%. (i) How will you hedge using put option on IBM stock to make sure that you receive at least $50 at the end of the year?...

The stock price of Comet Inc. is currently $30. The stock price a year from now...

The stock price of Comet Inc. is currently $30. The stock price a year from now will be either $50 or $10 with equal probabilities. The interest rate at which investors can borrow is 5%. Using the binomial option pricing model (OPM), the value of a call option with an exercise price of $40 and an expiration date one year from now should be worth what?

Medical Industry Stock - Pfizer Inc. - (PFE) Complete a technical analysis on your selected stock....

Medical Industry Stock - Pfizer Inc. - (PFE) Complete a technical analysis on your selected stock. Your analysis may involve any one or more of the technical measures listed below: Dow Theory Candlestick charts Odd-Lot Theory Put-Call Ratio Short Sales Volume indicators Advance-decline lines Bollinger bands Complete the following tasks: Assess the current price in relation to the technical indicator(s). Assess whether corporation's stock price reflects a "random walk" or if there are patterns in its time series of prices....

Question