Use the Appropriate Factors from Chapter 6, Table 6-4 (Present

question 44

Essay

Use the appropriate factors from Chapter 6, Table 6-4 (Present Value of $1)or Table 6-5 (Present Value of an Annuity of $1), to answer the following questions.
(a.)Yoko Co.'s common stock is expected to have a dividend of $3 per share for each of the next four years, and it is estimated that the market value per share will be $42 at the end of four years.If an investor requires a return on investment of 12%, what is the maximum price the investor would be willing to pay for a share of Yoko Co.common stock today?
(b.)Lashana bought a bond with a face amount of $1,000, a stated interest rate of 10%, and a maturity date 20 years in the future for $1,025.The bond pays interest on a semi-annual basis.Five years have gone by and the market interest rate is now 12%.What is the market value of the bond today?

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Definitions:

Motion Parallax

A depth cue based on the fact that, as an observer moves, the retinal images of nearby objects move more rapidly than do the retinal images of objects farther away.

Binocular Disparity

The difference in the images received by the two eyes due to their different perspectives, which contributes to depth perception and stereopsis.

Eyes Distance

This term typically refers to the measurement between the centers of the pupils of the two eyes, important in optical and vision sciences.

Pictorial Cues

Patterns that can be represented on a flat surface in order to create a sense of a three-dimensional object or scene.