Ask Question
25 December, 06:28

Zephyr Inc. sells wind based systems for generating electricity. The company pays no dividends, but you estimate the stock will be worth $50 per share 5 years from now and you require a 15% rate of return for stock investments of this type. What price should you be willing to pay for this stock?

+4
Answers (1)
  1. 25 December, 09:49
    0
    The price you should be willing to pay for this stock = $24.86

    Explanation:

    To estimate the stock will be worth $50 per share 5 years from now and you require a 15% rate of return for stock investments of this type. Therefore 50 = xX1.15^5 by solving this equation we have x = 24.86. The price you should be willing to pay for this stock = $24.86
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Zephyr Inc. sells wind based systems for generating electricity. The company pays no dividends, but you estimate the stock will be worth ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers