Question

In: Finance

A stock has declared quarterly dividends of $0.5 to be paid in 3, 6, and 9...

A stock has declared quarterly dividends of $0.5 to be paid in 3, 6, and 9 months. The current stock price is $60. The risk-free interest rate is 12% (APR compounded quarterly). What is the fair forward price for a 9 month forward contract on the stock?

Solutions

Expert Solution

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

How are the dividends declared and paid by a subsidiary during the year eliminated in the...
How are the dividends declared and paid by a subsidiary during the year eliminated in the consolidated workpapers under each method of accounting for investments?
Oriole Company declared dividends of $19700 in fiscal 2021 and paid the $41000 dividends that were...
Oriole Company declared dividends of $19700 in fiscal 2021 and paid the $41000 dividends that were declared in fiscal 2020. Oriole paid the 2021 dividends in early fiscal 2022. Which of the following journal entries would NOT be recorded in fiscal 2021? debit to Dividends Payable and credit to Cash for $41000 debit to Retained Earnings and credit to Cash Dividends for $19700 debit to Dividends Payable and credit to Cash for $19700 debit to Cash Dividends and credit to...
Apple has just paid a quarterly dividend of $3.72. Dividends are expected to grow by 10%...
Apple has just paid a quarterly dividend of $3.72. Dividends are expected to grow by 10% for the next 4 quarters, and then grow by 1% thereafter. Apple has a required quarterly return of 5%. What is the value of the expected dividends in four quarters? What is the horizon value in the fourth quarter (P4P4)? What is the value of the stock now?
the dividends are paid at the beginning of every quarter, and the quarterly grow rates are...
the dividends are paid at the beginning of every quarter, and the quarterly grow rates are estimated to be 30%, 25%, 20%, 15% per quarter for the first quarters respectively, and stay constant as 5% thereafter. The effective quarterly interest rate is 10% per quarter. you are on dec 31st today and the next dividends shareholders are just about to receive is $1. what is the expected stock price at the end of 15 years in the future?
The annual report for Sneer Corporation disclosed that the company declared and paid preferred dividends in...
The annual report for Sneer Corporation disclosed that the company declared and paid preferred dividends in the amount of $160,000 in the current year. It also declared and paid dividends on common stock in the amount of $2.60 per share. During the current year, Sneer had 1 million common shares authorized; 360,000 shares had been issued; and 154,000 shares were in treasury stock. The opening balance in Retained Earnings was $860,000 and Net Income for the current year was $360,000....
The annual report for Sneer Corporation disclosed that the company declared and paid preferred dividends in...
The annual report for Sneer Corporation disclosed that the company declared and paid preferred dividends in the amount of $190,000 in the current year. It also declared and paid dividends on common stock in the amount of $2.90 per share. During the current year, Sneer had 1 million common shares authorized; 390,000 shares had been issued; and 181,000 shares were in treasury stock. The opening balance in Retained Earnings was $890,000 and Net Income for the current year was $390,000....
The annual report for Sneer Corporation disclosed that the company declared and paid preferred dividends in...
The annual report for Sneer Corporation disclosed that the company declared and paid preferred dividends in the amount of $200,000 in the current year. It also declared and paid dividends on common stock in the amount of $3.00 per share. During the current year, Sneer had 1 million common shares authorized; 400,000 shares had been issued, and 190,000 shares were in treasury stock. The opening balance in Retained Earnings was $900,000 and Net Income for the current year was $400,000....
Net income for the year was $117,000. Dividends of $114,000 cash were declared and paid. Scoreteck’s...
Net income for the year was $117,000. Dividends of $114,000 cash were declared and paid. Scoreteck’s only noncash expense was $87,000 of depreciation. The company purchased plant assets for $87,000 cash. Notes payable of $37,000 were issued for $37,000 cash.    Complete the following spreadsheet in preparation of the statement of cash flows. (The statement of cash flows is not required.) Report operating activities under the indirect method. (Enter all amounts as positive values.) SCORETECK CORPORATION Spreadsheet for Statement of...
Stock A has a beta of 0.5, and investors expect it to return 3%. Stock B...
Stock A has a beta of 0.5, and investors expect it to return 3%. Stock B has a beta of 1.5, and investors expect it to return 5%. Use the CAPM to calculate the market risk premium and the expected rate of return on the market. (Enter your answers as a whole percent.) Market Risk Premium : ____ % Expected market rate of return ___ %
The Apple just paid a $0.8 quarterly dividend. The dividends are expected to grow at 20%...
The Apple just paid a $0.8 quarterly dividend. The dividends are expected to grow at 20% per year for the next 3 years. After that, the growth rate is expected to go down to the industry average of 8% per year and stay at this level forever. The required rate of return on Apple is 15% per annum. 1.Draw the time line, showing dividends of Apple. 2.Find the price of Apple stock. 3.Find the value of its growth opportunities (PVGO)....
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT