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- Calculate the value of a stock that is expected to pay a constant dividend of $1.05per year if the required return is 11%.A preferred stock pays an annual dividend of $1.25. What is one share of this stock worth today if the rate of return is 13.5 percent? Show your workWhich of the following statements about the current value of a short European call option on Warwick plc stock, a non-dividend-paying stock, is/are true? (a) The current value of a short European call option is less than or equal to zero. (b) The current value of a short European call option decreases as the volatility of returns on Warwick plc stock increases, holding all else constant. (c) The current value of a short European call option decreases as the price of Warwick plc stock increases, holding all else constant.
- A stock you are evaluating is expected to experience supernormal growth in dividends of 12 percent over the next three years. Following this period, dividends are expected to grow at a constant rate of 4 percent. The stock paid a dividend of $1.50 last year and the required rate of return on the stock is 11 percent. Calculate the stock's fair present value. (Do not round intermediate calculations.) Please show all the steps, including the equation(s).You've estimated the following expected returns for a stock, depending on the strength of the economy: State (s) Probability Expected return Recession 0.3 -0.03 Normal 0.5 0.08 Expansion 0.2 0.13 What is the expected return for the stock? What is the standard deviation of returns for the stock?The closing Stock is $10,000 million and opening stock is 50% of closing stock Calculate change in stock
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