1. The next dividend payment by The Jeans Co. will be $1.89 per share. Investors expect the dividends to to maintain a growth rate of 5 percent forever. The stock currently sells for $38 per share. Calculate the dividend yield.
Dividend yield %
Calculate the expected capital gains yield.
Capital gains yield %
2. You are considering leasing a small warehouse for 3 years. The lease requires monthly payments of $448.00. Somewhere on the lease paperwork you notice a statement to the affect that you will be charged an nominal rate of4.800% gnore the turn-in value or salvage value of the warehouse. What is the value of the lease? (Draw a cash flow diagram).