Help Help lfeday the ter-year bond has a no anal rate freturn of24% and ifthe in

Question

Help Help lfeday the ter-year bond has a no anal rate freturn of24% and ifthe inflation rate is 1.7%, what i redraeofiterest icoordingtothe exact Fisher Effect? Hint: (1+R)=(1+r)(1+h) a The real rate of interest is 4.14% 6 b. c. d. The real rate of interest is 2.4% The real rate of interest is 69% The real rate of interest is 1.7% 7 Which of the following has the LEAST amount of reinvestment risk? a ATreasury bond b A Treasury note C. A Treasury bill d. All of the above have the same amount of reinvestment risk Which of the following has the LEAST amount of interest rate risk? a. A Treasury bond b. A Treasury note A Treasury d. All of the above have the same amount of interest rate risk 9 Which one of the following is computed by dividing next year's annual dividend by the current stock price? a. growth rate b. yield to maturity e dividend yield d. capital gains yield 10. The Marcus Corporation currently pays a dividend (Da) of so.50 par year. But dividends are anticipated to Corp is 8%, what is the share price of grow at a 6% annual rate forever. If the required return on Marcus Marcus C stock using the Dividend Growth Model? c. $24.28 $22.21 b $25.00 11. The stock price of Dick's Pizza is $68.Investors require an 11 percent rate of return on similar stocks. If company's Dick's Pizza plans to pay a dividend of $3.40 next year, what growth rate is expected f stock price? or That would be a 8% growth rate. That would be a 7% growth rate That would be a 6% growth rate. That would be an 5% growth rate. b. " A preferred stock in Probst Enterprises pays $2.80 per year. The required returm for this preferred stock is 61%, what is the price of the preferred stock for Probst Enterprises? a $31.22 b $45.90 12. c. $34.85 d. $44.06 13. What is the model called that determines the present value of a stock based on its next annual dividend, the dividend growth rate, and the applicable discount rate? a the P/E multiple model b. the zero growth model c. the dividend growth model d the capital rationing model

Explanation / Answer

6)

Real interest rate (1+Nominal rate)÷(1+Inflation rate)-1 Here, Nominal rate 2.40% Inflation rate 1.70% Real interest rate 0.69% (1+2.40%)÷(1+1.70%)-1

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