13.3.1 - Show calculations. QUESTION #2 If you buy shares...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
TPL STOCK VALUATION You are considering buying shares in Transcanada Pipelines (“TPL”) that pays a $1.50 dividend per share at the end of each year. Four years from now you believe that you could sell the TPL stock for $45.00. You require an 8% rate of return. QUESTION #1: Would you buy the stock today for $35.00?
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Show calculations. QUESTION #2 If you buy shares in TPL stock today for $35.00, receive the $2.50 dividend for 4 years and sell the stock for $35.00 in 3 yearswould your rate of return be: CHECK ONE More than 8%? Less than 8%?...
View Full Document

Ask a homework question - tutors are online