FIS 240 Appendix D

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Problem 1: Darla wants to invest in Pension Corporation stock but she is not sure if the investment will meet her required rate of return. The investment will cost Darla $71.82 per share and she is considering a purchase of 2 shares. Pension Corporation has paid the same annual dividend. $30. for the past 10 years which Darla does not expect to change. The WACC is 12% and Darla's required rate of return is 11%. Darla tends to hold stocks for 3 to 5 years

Step 1 - Break apart the problem. Enter the values into the appropriate boxes.

Step 2 - Write out the formula for the equation.

Step 3 - Calculate. Enter each year

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    *** 240 Appendix *

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    FIS 240 Appendix


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