Question

You are planning to buy Apple stock. and you expect it to pay a dividend of $3 in 1 year, $4.25 in 2 years, and $6.00 in 3 years. You expect to sell the stock for $100 in 3 years. If your required return for purchasing the stock is 12 percent, how much would you pay for the stock today?

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Abdul-Rahim Taysir

Answer #1

Maximum amount that one will pay for a stock will be the present value of inflows to be received from that stock during its life.

**Therefore, Computation of the present value of inflows
will be as follows:**

**So the maximum one will pay for the apple stock will be
$81.71.**

*Please note that there can be a difference in cents which depends on the no of decimals taken of PV Factor.

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What is the difference of the future amounts of the annuity due
and ordinary annuity for regular quarterly payments of 14000 at 14%
compounded quarterly.
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Juvani has a beta of 1.50, the risk-free rate of interest is
currently 12 percent, and the required return on the market
portfolio is 18 percent. The company plans to pay a dividend of
$2.45 per share in the coming year and anticipates that its future
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If you expect the market to increase which of the following
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Select one:
a. a portfolio with a beta of 1.0
b. a portfolio with a beta of 0
c. a portfolio with a beta of -0.5
d. a portfolio with a beta of 1.9
A firm is evaluating an investment proposal which has an initial
investment of $5,000 and cash flows presently valued at $4,000. The
net present value of the investment is ______.
Select...

If you expect the market to increase which of the following
portfolios should you purchase?
Select one:
a. a portfolio with a beta of 1.0
b. a portfolio with a beta of 0
c. a portfolio with a beta of -0.5
d. a portfolio with a beta of 1.9
A firm is evaluating an investment proposal which has an initial
investment of $5,000 and cash flows presently valued at $4,000. The
net present value of the investment is ______.
Select...

During the year, ABC Corporation's Treasury Stock account
increased $46,000 due to a cash purchase, cash dividends of $42,000
were paid and the company reported net income of $200,000. On the
statement of cash flows (indirect method), Net cash used by
financing activities is:
Select one:
a. ($88,000).
b. ($112,000).
c. ($154,000).
d. ($158,000).
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Abdul-Rahim Taysir

During the year, ABC Corporation's Treasury Stock account
increased $46,000 due to a cash purchase, cash dividends of $42,000
were paid and the company reported net income of $200,000. On the
statement of cash flows (indirect method), Net cash used by
financing activities is:
Select one:
a. ($88,000).
b. ($112,000).
c. ($154,000).
d. ($158,000).
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Abdul-Rahim Taysir

You learned about the legal context of HRM in the United
States,what are the major laws and regulations affecting human
resources management in Palestine?
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Abdul-Rahim Taysir

the difference between two different loan plans is 101,525.598.
the first plan is infinite annual end-period equal payments, while
the second plan is the same end-period but payable in 24 years.
what is the amount of the equal payments if it is the same in both
plans and interest is computed at 10% compounded annually
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Abdul-Rahim Taysir

OMAR Company. reported net income of $53,000; depreciation
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Select one:
a. $70,500.
b. $67,500.
c. $57,500.
d. $64,500.
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Abdul-Rahim Taysir

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