In practice, a common
way to value a share of stock when a company pays dividends is to
value the dividends over the next five years or so, then find the
“terminal” stock price using a benchmark PE ratio. Suppose a
company just paid a dividend of $1.21. The dividends are expected
to grow at 16 percent over the next five years. The company has a
payout ratio of 40 percent and a benchmark PE of 23. The required
return is 12 percent.
What are the projected dividends for each of the next five years?
(Do not round intermediate calculations and round your
answers to 2 decimal places, e.g.,32.16.)
Dividend | |
Year 1 | $ |
Year 2 | $ |
Year 3 | $ |
Year 4 | $ |
Year 5 | $ |
What is the EPS in five years? (Do not round intermediate
calculations and round your answer to 2 decimal places,
e.g.,32.16.)
EPS in 5 years
$
What is the target stock price in five years? (Do not round
intermediate calculations and round your answer to 2 decimal
places, e.g.,32.16.)
Stock price in 5 years
$
What is the stock price today? (Do not round intermediate
calculations and round your answer to 2 decimal places,
e.g.,32.16.)
Stock price today
$
In practice, a common way to value a share of stock when a company pays dividends...
In practice, a common way to value a share of stock when a company pays dividends is to value the dividends over the next five years or so, then find the "terminal" stock price using a benchmark PE o. Suppose a company just paid a dividend of $1.17. The dividends are expected to grow at 12 percent over the next five years. The company has a payout ratio of 40 percent and a benchmark PE of 19. The required return...
In practice, a common way to value a share of stock when a company pays dividends is to value the dividends over the next five years or so, then find the "terminal" stock price using a benchmark PE ratio. Suppose a company just paid a dividend of $1.75. The dividends are expected to grow at 21 percent over the next five years. In five years, the estimated payout ratio is 35 percent and the benchmark PE ratio is 33. a....
In practice, a common way to value a share of stock when a company pays dividends is to value the dividends over the next five years or so, then find the “terminal” stock price using a benchmark PE ratio. Suppose a company just paid a dividend of $1.36. The dividends are expected to grow at 13 percent over the next five years. In five years, the estimated payout ratio is 40 percent and the benchmark PE ratio is 19. a....
In practice, a common way to value a share of stock when a company pays dividends is to value the dividends over the next five years or so, then find the "terminal" stock price using a benchmark PE ratio. Suppose a company just paid a dividend of $1.31. The dividends are expected to grow at 16 percent over the next five years. The company has a payout ratio of 30 percent and a benchmark PE of 19. The required return...
In practice, a common way to value a share of stock when a company pays dividends is to value the dividends over the next five years or so, then find the "terminal" stock price using a benchmark PE ratio. Suppose a company just paid a dividend of $1.19. The dividends are expected to grow at 14 percent over the next five years. The company has a payout ratio of 30 percent and a benchmark PE of 21. The required return...
In practice, a common way to value a share of stock when a company pays dividends is to value the dividends over the next five years or so, then find the “terminal” stock price using a benchmark PE ratio. Suppose a company just paid a dividend of $1.35. The dividends are expected to grow at 13 percent over the next five years. In five years, the estimated payout ratio is 35 percent and the benchmark PE ratio is 25. ...
In practice, a common way to value a share of stock when a company pays dividends is to value the dividends over the next five years or so, then find the "terminal" stock price using a benchmark PE ratio. Suppose a company just paid a dividend of $1.18. The dividends are expected to grow at 13 percent over the next five years. The company has a payout ratio of 45 percent and a benchmark PE of 20. The required return...
In practice, a common way to value a share of stock when a company pays dividends is to value the dividends over the next five years or so, then find the “terminal” stock price using a benchmark PE ratio. Suppose a company just paid a dividend of $1.34. The dividends are expected to grow at 19 percent over the next five years. In five years, the estimated payout ratio is 45 percent and the benchmark PE ratio is 22. After...
In practice, a common way to value a share of stock when a company pays dividends is to value the dividends over the next seven years or so, then find the “terminal” stock price using a benchmark PE ratio. Suppose a company just paid a dividend of $3.50. The dividends are expected to grow at 8 percent over the next seven years. The company has a payout ratio of 35 percent and a benchmark PE of 45. What is the...
Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next 9 years, because the firm needs to plow back its earnings to fuel growth. The company will then pay a dividend of $13.25 per share 10 years from today and will increase the dividend by 5 percent per year thereafter. The required return on the stock is 13 percent. What is the price of the stock 9 years from today? (Do...