Should you buy the shares if the current market price of


You are considering buying 100 shares of Merrick Industries common stock. The common stock is expected to pay a dividend of $3.50 a year from today; the growth rate of the dividends is 4%; the covariance between Merrick's return and the marker's return is expected to be 0.003; the variance of the market's return is expected to be 0.002. It is also estimated that the return on the TSX/S&P is 15% and the return on government of Canada T-Bills is 7%. Should you buy the shares if the current market price of Merrick's common stock is $21.00? Show your work.

Solution Preview :

Prepared by a verified Expert
Basic Computer Science: Should you buy the shares if the current market price of
Reference No:- TGS02492559

Now Priced at $10 (50% Discount)

Recommended (97%)

Rated (4.9/5)