The stock and bond has the same rate of return so we are, Financial Management

+44 141 628 6080
[email protected]

The stock and bond has the same rate of return so we are

You have two asset choices. One is buying a share of Dell stock today, you will be able to sell it in 5 years for $50. You will also receive a $2 dividend at the end of each of those 5 years. Another choice is paying $45 to buy a risk-free bond today, the yield rate of bond is 10% and you will sell it in 5 years. Suppose the interest rate(discount rate) is 12% for both assets, which asset will you choose?

A. Stock

B. Bond

C. The stock and bond has the same rate of return, so we are indifferent between these two assets.

View Complete Question

Request for Solution File

Ask an Expert for Answer!!

Financial Management: The stock and bond has the same rate of return so we are

Reference No:- TGS02800747

Expected delivery within 24 Hours

Have a Question? (oR Write a Review)

Write atleast 100 words!!

Asked Questions

Symbolic interactionism took off as a theoretical approach

Question: Symbolic interactionism took off as a theoretical approach to the study of deviance during the 1960s

How sociological models help understand mental illness

Based on the chapter by Allen Furr on the sociology of mental illness, How do sociological models help you understand mental illness differently

Which are forms of media bias

Question: Which of the following are forms of media bias? (Select all that apply)

Why does victor coin the term hyper-violence

Why does victor coin the term hyper-violence instead of just using violence? And second, how is hyper-violence display in the Oakland community?

How coastlines are vulnerable to multiple climate change

Even though are coastlines are very vulnerable to multiple climate change impacts, the good news is that because most of our urban settlements

Compare critical feminist theory and power-control theory

Compose a paper that compares and contrasts critical feminist theory and power-control theory as forms of gendered criminology. Your paper should:

How is it rational for the owner of a factory or plantation

How is it rational for the owner of a factory or plantation to work his laborers to death or disability when they can easily be replaced cheaply?

Request for Solution File

Ask an Expert for Answer!!

Financial Management: The stock and bond has the same rate of return so we are

Reference No:- TGS02800747

Have a Question? (oR Write a Review)

Recent Questions Asked Financial Management

Q : Give 2 of the 3 measures to guard against social loafing

Q : Describe whether the shared economy is creating new value

Q : Compute duration and modified duration for each bond

Q : This short paper will challenge you to apply what you have

Q : The stock and bond has the same rate of return so we are

Q : Do firms really have a choice when it comes to

Q : A company has 2 million shares of common stock outstanding

Q : Given the project data below which activities are critical

Q : How can nurses address the issue of liability so their