FIN3403

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Author:
as09d
ID:
7832
Filename:
FIN3403
Updated:
2010-02-23 09:14:35
Tags:
HOMEWORK CHAPTER 7
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Description:
Homework Help
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  1. If you are told that an initial dividend will be paid and then for the next 5 years there be an increase and a required return; how do you find value of the share today?
    • Initial Dividend + Increase
    • ______________________

    1 + Required Return ^ each year


    Example

    • Year 2:
    • 14
    • __

    1.11^2
  2. How do you get your coupon payment?
    COUPON RATE X PAR VALUE
  3. After you get your P0, they ask for the future price in 3 years... You find that how? Will you use your dividend payment? Which rate do you use?
    Inputing:

    • N
    • I/Y - Growth
    • PV
  4. If you are told that a dividend will only be paid for the next X years with a certain required return, how would you find the current share price?
    CF

    • CO1 = dividend
    • F01 = x years

    NPV

    • I = required return
    • NPV = CPT

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