You purchase 200 shares of stock for $80 a share. The stock pays a $3 per share dividend at year-end. What is your real

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answerhappygod
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You purchase 200 shares of stock for $80 a share. The stock pays a $3 per share dividend at year-end. What is your real

Post by answerhappygod »

You purchase 200 shares of stock for $80 a share. The stock pays
a $3 per share dividend at year-end.
What is your real (inflation-adjusted) rate of return if the
inflation rate is 6% and the year-end stock price is $50?
Round the answer to two decimal places and report it as a
percentage figure without the % symbol.
Top hedge fund manager Sally Buffit believes that a stock with
the same market risk as the S&P 500 will sell at year-end at a
price of $50. The stock will pay a dividend at year-end of
$4.00. Assume that risk-free Treasury securities
currently offer an interest rate of 3.0%. The historical
average risk premium for the S & P 500 index is 6% per
annum. What should be the price of the stock Sally should be
willing to pay today?
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