Question

1. Nancy will need $500,000 in 20 years to buy a house on the water in Ft. Lauderdale Florida. In order to reach her goal, she decides to invest in a real estate stock that has paid a consistent annual dividend of 14%. How much does Jenny have to invest in the fund each month in order to achieve her goal of 500,000?

		A. Need more information to answer this question
		B. 589.00
		C. 2375.00
		D. 384.27

2. The Dividend Discount Model is one of the best valuation tools for analyzing a stock because:

		A. It is not a good tool since it is difficult to find the dividend growth rates
		B. It is the most popular method to value stocks of any company
		C. It can easily value a company's stock for any company that pays dividends
		D. It is not one of the best valuation tools since not all stocks pay dividends and few consistently grow their dividends.

3. Interest Rates are sometimes referred to as:

		A. Yield
		B. Future Value
		C. Compounding rate
		D. None of these

Answer 1

Ans 1: How much does Jenny have to invest in the fund each month in order to achieve her goal of 500,000?

D. 384.27

Considering 384.27 invested for the 14 % dividend and duration is 20 years it would provide approx value of 500000 $ .

Ans 2. The Dividend Discount Model is one of the best valuation tools for analyzing a stock because:

D. It is not one of the best valuation tools since not all stocks pay dividends and few consistently grow their dividends.

Ans 3. Interest Rates are sometimes referred to as: A.  Yield

the proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.