Calculate your total return from holding vandhalia stock


Task: Use the information for the question(s) below.
 
Vandhalia Corporation is expected pay a dividend of $1.40 per share at the end of this year and a $1.50 per share at the end of the second year. You expect Vandhalia's stock price to be $25.00 at the end of two years. Vandhalia's equity cost of capital is 10%
 
Question 1: What is the price you would be willing to pay today for a share of Vandhalia stock, if you plan to hold the stock for two years?
 
Question 2: Suppose you plan to hold Vandhalia stock for one year. What is the price you would expect to be able to sell a share of Vandhalia stock in one year?
 
Question 3: Suppose you plan to hold Vandhalia stock for only one year.  What is your capital gain from holding Vandhalia stock for the first year?
 
Question 4: Suppose you plan to hold Vandhalia stock for only one year. What is your capital gain rate from holding Vandhalia stock for the first year?
 
Question 5: Suppose you plan to hold Vandhalia stock for only one year. What is our dividend yield from holding Vandhalia stock for the first year?
 
Question 6: Suppose you plan on purchasing Vandhalia stock in one year, right after the $1.40 dividend is paid.  You then plan on selling your stock at the end of year two, right after the $1.50 dividend is paid.  What is the capital gain rate that you will receive on your investment?
 
Question 7: Suppose you plan on purchasing Vandhalia stock in one year, right after the $1.40 dividend is paid.  You then plan on selling your stock at the end of year two, right after the $1.50 dividend is paid.  What is the dividend yield that you will receive on your investment? 
 
Question 8: Suppose you plan on purchasing Vandhalia stock in one year, right after the $1.40 dividend is paid. You then plan on selling your stock at the end of year two, right after the $1.50 dividend is paid.  What is the total return that you will receive on your investment?
 
Question 9: Suppose you plan to hold Vandhalia stock for only one year. Calculate your total return from holding Vandhalia stock for the first year. Explain what this means.

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Microeconomics: Calculate your total return from holding vandhalia stock
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