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Read DetailsYou buy a share of The Ludwig Corporation stock for $[P0]. You expect it to pay dividends of $2.15, $2.3650, and $2.6015 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $[P3] at the end of 3 years. Assuming that going forward, dividends are expected to grow at the same rate at which they have grown over the last three years, you can add the dividend yield to the expected growth rate to obtain the expected total rate of return. What is this stock’s expected total rate of return ? Do not round intermediate calculations. Round your answer to two decimal places and express in percentage form (x.xx%).
Read DetailsLane Manufacturing’s stock currently sells for $21 a share. The stock just paid a dividend of $1.20 a share (i.e., D0 = $1.20), and the dividend is expected to grow forever at a constant rate of 5% a year. What is the estimated required rate of return on Lane’s stock? Do not round intermediate calculations. Round your answer to two decimal places and express in percentage form.
Read DetailsJack’s Hardware Co. has issued bonds that have a 10.125% coupon rate, payable semiannually. The bonds mature in 35 years, have a face value of $1,000, and a yield to maturity of 9.75%. What is the price of the bonds? Round your answer to the nearest cent.
Read DetailsStock R has a beta of 1.80, Stock S has a beta of 0.55, the expected rate of return on an average stock is 8.5%, and the risk-free rate is 4%. By how much does the required return on the riskier stock exceed that on the less risky stock? Round your answer to two decimal places and express in percentage form.
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