SHOW STEP BY STEP WORK ANSWER IS 11.62%
Expected rate of return=(D1/Current price)+Growth rate
=[(3*1.063)/60]+0.063
which is equal to
=11.62%(Approx).
SHOW STEP BY STEP WORK ANSWER IS 11.62% A common stock is selling for $60 and...
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(Related to Checkpoint 10.1) (Common stock valuation) Header Motor, Inc., paid a $3.43 dividend last year. At a constant growth rate of 3 percent, what is the value of the common stock if the investors require a 8 percent rate of retum? $(Round to the nearest cent) The value of the common stock is (Common stock valuation) Gilland Motor, Inc., paid a $4.08 dividend last year. If Gilliland's return on equity...
In all cases of common stock, the investor wishes to hold the common stock for various holding periods. 1.Calculate the value of a 10-year, non-coupon bond, which has a par value of S 1,000, pays 9% interest, and the investor wants an 11% return. Explain the meaning of your result. 2. Calculate the value of a coupon bond that matures in 11 years, which has an even value of $ 1.000, pays 8% interest and the investor wants a 9%...
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1. (1 credit) Wilson's Meats common stock is valued at $11.05. The firm pays annual dividends which increase at a constant rate. The last dividend paid was $1.24. The required return is 14%. What is the dividend growth rate? 2. (1 credit) John Wilde Industries has a retention ratio of 0.75, dividends of $46,000, and total equity of $2.9 million. What is the firm's sustainable rate of growth?
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7. A share of common stock has an expected long-run constant dividend growth rate of -5%, that is, the dividends are declining at 5% per year. The most recent dividend Do, was $5.00. The required rate of return on the common stock is 18%. Then, using the dividend growth model, calculate the current price of the stock. A share of common stock has an expected long-run constant dividend growth rate of 6%. and the most recent dividend...
a. The common stock of Russel, Corp. is currently selling at $50 and investors require a rate of return of 15%. Russel is expected to pay a dividend of $2. At what rate the market would expect Russel's dividends to growth? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Growth Rate = ? b. What will be the price of Russel's common shares if analysts revised its dividend growth rate down to 5%?(Round your answer to...
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3. Beans Corp just paid a dividend of $4.00. The dividend will grow at a rate of 15% for 2 years and then settle down to a more normal 6% growth rate, that will last indefinitely. If investors expect a 9% return on the stock what should the selling price be today?
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Please Kindly Show Step By Step Using EXCEL Formula Thank you Sheridan, Inc., paid a dividend of $4.27 last year. The company's management does not expect to increase its dividend in the foreseeable future. If the required rate of return is 12.5 percent, what is the current value of the stock? (Round answer to 2 decimal places, e.g. 15.25.) Current value
Valuation of Stock 1) P. Noel Company's common stock has just paid a $2.00 dividend. If investors believe that the expected rate of return on P. Noel is 14% and that dividends will grow at the rate of 5% per year for the foreseeable future, what is the value of a share of P. Noel stock? A) $15.00 B) $22.22 C) $23.33 D) $40.00 2) Green Company's common stock is currently selling at $24.00 per share. The company recently paid...