Holly is considering purchasing a new car for $30,000. The dealer is offering two mutually exclusive options on the purchase: o Option 1: Receive a $2,000 rebate on the price of the car and finance the balance over 5 years at 4% interest, or o Option 2: Finance the vehicle for 7 years at 0% interest with no rebate. Which of the following options should Holly select if her goal is to minimize the total amount she pays for the car?
Option 1 is better.
Option 2 is better.
Both options cost the same.
There is not enough information to answer the question.
2. Use the Gordon Model to estimate the expected price, E(P0), of the following stock:
Quarterly dividend per share 5 years ago: $3
Quarterly dividend per share just paid: 3.829
Required rate of return of the stock: 20%
a. $107.21
b. $98.03
c. $101.72
d. $104.87
e. $110.77