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W4P1
Resources: Stock Valuation Template
Calculate the following stock valuation problems:
- Company X is paying an annual dividend of $1.35 and has decided to pay the same amount forever. How much should you pay for the stock, if you want to earn an annual rate of return of 9.5% on this investment?
- You want to purchase common stock of Company X and hold it for 7 years. The company just announced they will be paying an annual cash dividend of $6.00 per share for the next 9 years. How much should you pay for the stock, if you will be able to sell the stock for $28 at the end of seven years and you want to earn an annual rate of return of 11% on this investment?
Select one of the companies studied by one of the group members in Week 3.
Search the Internet for financial information about the company selected.
Evaluate the following in a 525-word response:
- Characteristics of common and preferred stock.
- How stock markets work.
- The connection between the value of shares and dividends.
- Mention the ticker symbol of the company studied, the current price of the stock, and its financial history.
- Indicate if you would recommend investing in this stock and why. Explain.
Format your paper consistent with APA guidelines.
Click the Assignment Files tab to submit your assignment.
Advanced Time Value Of Money
An advertised monthly lending rate of 0.9% is about 11% per year. This difference between an advertised rate and the annualized rate is based on finer TVM details that may be overlooked by borrowers. Discuss how you may have used TVM in a recent investment or loan decision and explain some of the TVM details that may have been involved in your transaction.
If you have not used TVM in the past financial transactions what practical TVM application would you expect to encounter in your future. (focus on this )
Response briely to this discussion answer:
Sometimes with loans or credit cards, lenders can have hidden fees or add-ons for late payments which may make their advertised rates seem less than the actual annual rate which is charged. It’s important to research and read the small print for this reason when making a decision about lenders or even for savings. I had to do this when applying for a loan. If I had gone with the loan that was offered to me for the items I wanted then I would have paid not only for the advertised rate but also fees and if I defaulted then I would have to pay additional fees and the rate may have increased. I chose to go with the bank where I had an account at the time because my savings deposits would accrue interest and the loan payments would just come out of my account each month. The rate at the bank was also lower than the other rate because I had an account with them.
Prof Carter and Classmates,
Once my son was born we decided we wanted to start some sort of savings account for him, for the future. We explored our options and decided to go with a CD’s and we then had to decided which bank to go with. We first looked at the bank I work at and our rate was only 1% for 5 years and then we looked at our credit union and for 5 years at 2%. It was definitely common sense which bank we decided to invest our son’s money into especially when we are earning more money in the end. I personally feel that it is pretty sad how low interest rate is on products when it comes to earning interest on your money, hopefully it will come back up soon.
Health Service Finance Class
A hospital has contracted with an HMO to provide acute care inpatient services for $1,000 per day, subject to a 10 percent withhold. The proposed budget for inpatient services is based upon expected utilization of 600 days per 1,000 members at $1,000 per day, or $600,000 per 1,000 members. The hospital risk pool will be split equally between the hospital and a primary care physician group. If only 450 days per 1,000 members were utilized in the first year, how much would the hospital be paid per 1,000 members?
A not-for profit nursing home has total expenses of $20 million. Sales tax in the state is 7%. Expenses are broken down into salaries ($12 million), supplies ($6 million), and pharmacy ($2 million). The benefit received by the nursing home from the sales tax exemption assuming that pharmacy items are exempt from state sales tax is? (Points : 10)