Taxation

a.The In-Tech Co. just paid a dividend of $1 per share. Analysts expect its dividend to grow at 25% per year for the next three years and then 5% per year thereafter.

If the required rate of return on the stock is 18%, what is the current value of the stock?
b. Project Y has following cash flows: C0 = -800, C1 = +5,100, and C2 = -5,100. Calculate the IRRs for the project.
c. A firm has a general-purpose machine, which has a book value of $300,000 and is worth $500,000 in the market. If the tax rate is 20%, what is the opportunity cost

of using the machine in a project?
d. Stock M and Stock N have had the following returns for the past three years: 12%, -10%, 32%; and 15%, 6%, 24%, respectively. Calculate the covariance between the

two securities. (Ignore the correction for the loss of a degree of freedom.)

Sample Solution

The post Taxation appeared first on nursing writers.

 

“Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!”

The post Taxation first appeared on nursing writers.

"Is this qustion part of your assignmentt? We will write the assignment for you. click order now and get up to 40% Discount"