What is the most you should pay for a share of common stock


1. Dennis takes his Mercedes to have the GPS system repaired. In the trunk of his car is a briefcase containing $5,000 in cash. Is the cash bailed goods?

2. What is the most you should pay for a share of common stock that just paid a dividend of $1.68 if rate of return is 10% and you expect dividends to increase at a constant rate of 2%?

3. To conserve cash, Tesla issued a zero coupon bond which has exactly 8 years to maturity. If its current yield to maturity is 8.2%, what is its current market price?

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Financial Management: What is the most you should pay for a share of common stock
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