According to the Gordon growth model, what is the value of a stock with a dividend of $1, required return on equity of 10%, and expected growth rate of dividends of 5%? A. $2 B. $10 C. $20 D. $21
According to the Gordon growth model, what is the value of a stock with a dividend...
45) Using the Constant Growth (Gordon) Model, what should be the current price of a stock if the next expected dividend is $5, the stock has a required rate of return of 20%, and a constant dividend growth rate of 6%? A) $19.23 B) $25.00 C) $35.71 D) $37.86
Common stock value - Constant growth Use the constant growth model (Gordon growth model) to find the value of the firm shown in the following Dividend expected next year $1.13 Dividend growth rate 7.5% Required return 13.3% The value of the firm's stock is
When would it be important to AVOID using the Gordon growth model (also called the dividend discount model) to estimate the value of common stock in a future period? The required return on the stock is 5 percent and the expected dividend growth rate is 6 percent. There is an expectation that the dividend growth rate will continue indefinitely. The only reliable information available is the current dividend paid, the expected dividend growth rate, and the required return on common...
One of the circumstances in which the Gordon growth valuation model for estimating the value of a share of stock should be used is ( A, the lack of data on dividend payments O B. declining dividends O C. an erratic dividend stream O D. a steady growth rate in dividends One of the circumstances in which the Gordon growth valuation model for estimating the value of a share of stock should be used is ( A, the lack of...
Constant Growth Stock Valuation Investors require a 15% rate of return on Brooks Sisters' stock . What will be Brooks Sisters' stock value if the most recent dividend was $2 and if investors expect dividends to grow at a constant compound annual rate of (1) −5%, (2) 0%, (3) 5%, and (4) 10%? Using data from part a, what is the Gordon (constant growth) model value for Brooks Sisters' stock if the required rate of return is 15% and the expected...
Using the Gordon growth model for stock valuation show what will happen to the dividend yield of a stock when the required return on the stock increases.
Answer the questions 1.What is the value of a stock based on the dividend-growth model if the firm currently pays a dividend of $1.30 that is growing annually at 5 percent and the required return is 9 percent? 2. If you purchase the stock in Problem 1 for $31.21, what is the return on the investment? 3. A financial analyst recommends purchasing DUDDZ, Inc. at $24.49. The stock pays a $1.60 dividend which is expected to grow annually at 4...
Common stock value-Constant growth Use the constant-growth model (Gordon model) to find the value of each firm shown in the following table: (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Firm Dividend expected next year $1.20 4.00 0.65 6.00 2.25 Dividend growth rate 8.0% 5.0 10.0 8.0 8.0 Required return 13.0% 15.0 14.0 9.0 20.0 The value of firm A's stock is $ 24. (Round...
Given the information in the table, Current dividend $12.00 Growth Rate in Dividends 2% Required Return on Equity Rs 6% According to the Gordon Growth Model, what is the price of this stock in year 2 ?
please answer Question 2 20 pts Given the information in the table, Current dividend $12.00 Growth Rate in Dividends 2% Required Return on Equity Rs 6% According to the Gordon Growth Model, what is the price of this stock in year 2? $323.36 $307.96 $318.36 $325.80