MODULE 6 - UNRECORDED

MODULE 6 - UNRECORDED - View Attempt

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06_Unrecorded Stocks Started: April 17, 2010 7:36 PM Submitted: April 17, 2010 7:36 PM Time spent: 00:00:07 Total score: 0/245 = 0% Done 1-8 DCF model 1. Branscome expected dividend Sharon Branscome is considering buying the common stock of Altria Group (previously named Philip Morris). Ms. Branscome requires a nominal 24 percent per year rate of return on investment in stocks with Altria's beta of 1.05. She expects the stock price to be $97.88 at the end of her investment (holding) period in 1½ years. The most recent quarterly dividend (at time t=0) was 52½¢. The expected growth rate is a nominal 21% annualized quarterly rate. Draw a cash flow timeline and tell me the dividend Ms. Branscome expects at the end of the holding period in 1½. Nearest Student Response Value Correct Answer Feedback A. 71.37¢ B. 61.21¢ C. 58.16¢ D. 67.81¢ E. 64.42¢ General Feedback: This ISN'T an annuity. REM to use periodic rates for all values. The initial dividend at time t=0 isn't part of the intrinsic value calculation, but it determines the values for the subsequent six quarterly dividends. Score: 0/10 2. Branscome PV of dividends Sharon Branscome is considering buying the common stock of Altria Group. She requires a nominal 24 percent per year rate of return on investment in stocks with a Aaltria's beta of 1.05. Ms. Branscome expects the stock price to be $97.88 at the end of her investment (holding) period in 1½ years. The most recent quarterly dividend (at time t=0) was 52½¢ and she expects the dividend to grow at a nominal 21% annualized quarterly rate. What is the present value (at time t=0) of expected dividends Ms. Branscome should use in calculating intrinsic value? Nearest Student Response Value Correct Answer Feedback View Attempt https://ecampus.unt.edu/webct/urw/lc3868415321231.tp3868415343231/. .. 1 of 17 4/17/2010 7:40 pm
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Student Response Value Correct Answer Feedback A. $6.67 B. $3.07 C. $3.21 D. $3.15 E. $6.70 General Feedback: This ISN'T an annuity. REM to use periodic rates for all values. REM, too, that the dividend at time t=0 isn't part of intrinsic value because the model uses expected dividends, that is, the six quarterly dividend starting at the end of time t=1. Use the cash flow routine for this problem, then look at Exhibit 4 at the end of the chapter to see details. Score: 0/10 3. Branscome PV of sale price Sharon Branscome is considering buying the common stock of Altria Group. Ms. Branscome requires a nominal 24 percent per year rate of return on investment in stocks like Altria with a beta of 1.05. She expects the stock price to be $97.88 at the end of her investment (holding) period in 1½ years. How much is the present value (at time t=0) of the expected sale price of the common stock? Nearest
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MODULE 6 - UNRECORDED - View Attempt

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