P5 = P/E Ratio * EPS * (1 + g)5
= 20 * $1.50 * (1 + 0.15)5 = $60.34
Hence, Option "D" is correct.
Question 7 of 20 1 Points TROW has a current price of 25, an expected dividend...
Question 8 of 20 1 Points MBI has an expected dividend of $1.10 per share next year i.e. D1), current EPS of $2 and expected EPS growth of 10% per year. Based in a typical P/E ratio of 10, the expected price in two years will be $24.20 in two years (i.e. P2). According to the discounted dividend value model, what is the present value of MBI using a discount rate of 14% and a two years analysis period? A...
Question 23 1 pts NYM Corp.just paid a $3.00 dividend and has an expected dividend growth rate of 5% If the required rate of return on the stock is 10%, what is the stock's intrinsic value (according to the Discounted Dividend Model)? $63 $60 $30 $48
Question 10 1 pts What is the price of a stock who just paid a dividend of $2.00 per share assuming the following: • the growth rate in the dividend is expected to be 20% per year for 3 years • the normal growth rate in the dividend (i.e. after 3 years are up) is 5% per year and will go on indefinitely • the appropriate discount rate is 9% Question 2 1 pts The discounted cash flow model for...
Question 19 of 20 1 Points Based on the PEG ratio, which of the following is the most attractive for a growth investor? A. P/E ratio-20: growth(g)=35% B. P/E ratio=40: growthtg)=35% C. P/E ratio=20: growth(g)=25% D. P/E ratio=40: growth(8)=25% Reset Selection Mark for Review What's This
Mark for Review What's This? Question 12 of 20 1 Points The constant growth model: A. is well suited to valuing stocks with a growth rate greater than the required rate of return B. assumes the same growth rate for the forseeable future. C. uses a variable discount rate assumption. D. is insensitive to growth rate assumptions. Reset Selection Mark for Review What's This? n. 4440 o Et
Bruin Inc. has recently announced a $7.9 EPS. Earnings are expected to grow at 5 percent per year forever. The company will not pay dividends on the stock over the next 6 years. However, it will pay 30% of its earnings as dividend starting in year 7. The payout ratio will remain at 30% forever. Earnings will continue to grow at the same 5% rate. If the required rate of return on this stock is 15 percent, what is the...
Use the Constant Dividend Growth Model to compute the expected price of a stock in 2 years. Each share is expected to pay a dividend of $1.91 in one year. Investors' annual required rate of return is 16.2%, and the expected growth rate of the dividend is 5% per annum. Answer to the nearest penny. Answer:
A stock just paid an annual dividend of $2.7. The dividend is expected to grow by 8% per year for the next 3 years. The growth rate of dividends will then fall steadily (linearly) from 8% after 3 years to 5% in year 6. The required rate of return is 12%. 1.What is the stock price if the dividend growth rate will stay 0.05 (5%) forever after 6 years? 2.In 6 years, the P/E ratio is expected to be 20...
ABC corp has a stock price of $20.Its expected next dividend is $1 per share.Dividends are expected to grow at 3% per year.Using the Cash Flow Model , calculate the cost of Equity capital for ABC Corp?
Assume Highine Company has jst paid an annual dividend of $094 Analysts are predicting an 11.7% per year growth rate in eamings over the next fve years Aher then, Highine's eamings are expected to grow at the ouret industry average of 4.8% per year. If Highline's eqity cost of capital is 8.5% per year and is dividend payout ratio remains constant, for whal price does thee dividend discount model predict Highine stock shodd sel? The value of Highline's stock is...