To everyone who answered these previous questions: none matched the multiple cho
ID: 2697941 • Letter: T
Question
To everyone who answered these previous questions: none matched the multiple choice :/ so here are a few at a time ( ill send 3 our at a time) with the mulitple choice.. Thanks alot guys!
1.River Rock inc. just paid and annual dividend of $2.80. The company has increase its dividend by 2.5 percent a year for the past ten years and expects to continue doing so.What will a share of this stock be worth six years fron now if the required return is 16 percent?
$25.08
$24.65
$23.60
$26.90
$25.50
2. Suppose that in 2010 a $10 silver certificate from 1898 sold for $11,200. For this to have been true,what would the annual increase in the value of the certificate have been?
6.81 percent
7.49 percent
7.97 percent
7.23 percent
6.47 percent
3.The furniture showroom offers credit to its customers at a rate of 1.4 percent per month. What is the effective-annua rate of this credit offer?
16.80 percent
17.34 percent
16.52 percent
15.97 percent
18.16 percent
Explanation / Answer
1.River Rock inc. just paid and annual dividend of $2.80. The company has increase its dividend by 2.5 percent a year for the past ten years and expects to continue doing so.What will a share of this stock be worth six years fron now if the required return is 16 percent?
=(2.80*1.025^7)/(0.16-0.025) = 24.65
$24.65
2. Suppose that in 2010 a $10 silver certificate from 1898 sold for $11,200. For this to have been true,what would the annual increase in the value of the certificate have been?
6.47 percent
3.The furniture showroom offers credit to its customers at a rate of 1.4 percent per month. What is the effective-annua rate of this credit offer?
=(1.014)^12 -1 = 0.1816
18.16 percent
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