1. Given: Expected dividend is $3, initial stock price is $50 and the expected stock price 1 year from now is $45, then what is the Holding Period return?
2. Given: The expected rate of return is 11%, the dividend over the coming year will be $3, and the price next year is expected to be $125, then what is the intrinsic value of the stock right now?
3. You expect the price of IBX stock to be $74.25 per share a year from now. Its current market price is $50 and you expect it to pay a dividend over the coming year of $3.15 per share.
a. What is the dividend yield?
b. What is the rate of appreciation?
c. What is the expected one-year holding period return?
4. Suppose the stock has a beta of 3.15, the risk free rate is 6% per year, and the expected rate of return on the market portfolio is 21% per year, then what is the required rate of return on IBX stock?
5. What is the intrinsic value of IBX stock, and how does it compare to the current market price?
6. What is the value of a preferred stock (assume: Zero growth) paying a fixed dividend of $5 per share when the discount rate is 9%?