fin man

Rylan Industries is expected to pay a dividend of $5.20 year for the next four years. if the current price of Rylan stock is $32.63, and Rylan's equity cost of capital is 14%, what price would you expect Rylan's stock to sell for at the end of the four years?

29.52

Suppose you invested $60 in the Ishares Dividend Stock Fund (DVY). It paid a dividend of $0.70 today and then you sold it for $65. What was your return on the investment?

Investment price i.e. P0 =$60 Dividend received during the holding period = $0.63 sale price i.e. P1 = $65 Return on investment = (P1-P0 + dividend)/P0 x 100 =(65-60+0.63)/60 x100 =5.63/60 x100 = 9.38%

Sultan Services has 1.2 million shares outstanding. It expects earnings at the end of the year of $6.0 million. Sultan pays out 60% of its earnings in total: 40% paid out as dividends and 20% used to repurchase shares. If Sultan's earnings are expected to grow by 5% per year, these payout rates do not change, and Sultan's equity cost of capital is 10%, what is Sultan's share price?

Value of company = expected dividend / cost of equity - growth = 6 × 60% / 10% - 5 % =$72 million Sultans ,Price Per share = 72 / 1.2 = $60

What is a sunk cost?

a cost that has already been committed and cannot be recovered

how do we handle insterest expense when making a capital budgeting decision

interest expense is not used or accounted for

if a small business is using extra space at home for his business does it imply a zero opportunity cost for the space? explain why or why not

no , there is opportunity cost because. there is a cost for this because using it for business is giving up using the space for something else

a fellow student states that markets can not be efficient since ISU inc. announced record earning yesterday and their stock price went down. do you agree? why or why not

no, there may be more information we odnt know about

under what conditions will a zero coupon bod sell for a premium

when the interest rates are lower than when the bond was purchased