XYZ Company just paid a quarterly dividend of $3. The quarterly
dividends grow at an effective
quarterly rate of 1.5%. XYZ’s effective quarterly cost of capital
5%. What is the expected price of
XYZ stock in 3 years?
Quarterly Rate = (1.015)1/4 - 1 = 0.37%
Quarterly Growth Rate = (1.05)1/4 - 1 = 1.23%
Dividend in 13th quarter = 3(1.0037)13= $3.15
Using DDM Model,
Stock Price in Year 3 = 3.15/(0.0123 - 0.0037)
Stock Price in Year 3 = $366.28
XYZ Company just paid a quarterly dividend of $3. The quarterly dividends grow at an effective...
A company just paid a quarterly dividend of $1.00. The dividends are expected to grow by 0.5% each quarter. If the market requires an annual return of 9% on the company, what should be the company's stock price?
A company has just paid a $2 per share dividend. The dividends are expected to grow by 24% a year for 8 years. The growth rate in dividends thereafter is expected to stabilize at 4% a year. The appropriate annual discount rate for the company’s stock is 12%. a. What is the company’s current equilibrium stock price? b. What is the company’s expected stock price in 20 years?
ABC,. Inc just paid a dividend of $23. The dividends are expected to grow by 20% in Years 1 and 2. After that, the dividends are expected to grow by 3% each year. If the required rate of return is 18%, what is today's price of the stock?
XYZ Co. recently paid a dividend of $2.50. If dividends are expected to grow at a constant rate of 4% and the investor's required rate of return is 10%, what should the stock value be six years from now? Group of answer choices $54.83 $52.72 not enough information $53.89
LED, Inc. just paid a dividend of $2.50 per share. The dividends are expected to grow for the next 3 years at 8% per year, then grow at 3% per year forever. The required rate of return for LED stock is 12% per year. What should the market price of LED stock be? What should the ex-dividend stock price of LED be in year 2? If you purchased the share of LED at time 2, at the price you calculated...
3. Benton corp, just paid a dividend (D) of $1.94. Dividends are expected to grow next three years, then at a rate of 5.4% forever after that. Shareholders requis 9.6% for of a. What is the present value of the next three dividends? b. What is the present value of the price the stock would be expected to sell for at the end of three years?
A stock just paid a dividend this morning of $1.26. Dividends are expected to grow at 15.00% for the next two years. After year 2, dividends are expected to grow at 8.97% for the following three years. At that point, dividends are expected to grow at a rate of 4.00% forever. If investors require a return of 14.00% to own the stock, what is its intrinsic value?
XYZ’s stock paid $2.00 dividend last year. The company’s earnings and dividends are expected to grow at an annual rate of 5%. Given its risk, if the investors’ required rate of return on the stock is 15%, what is the market value of XYZ’s stock?
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...
Problem1: The XYZ Co. just paid a dividend of $1.95 per share on its stock. The dividends are expected to grow at a constant rate of 4% per year indefinitely. Assume investorsrequire a return of 10.5 % on the XYZ Co. stock. What will the price be in 3 years? Show yourwork/calculations Problem2: The ABCorp. paid an annual dividend of $1.37 a share last month. Today, the company announced that future dividends will be increasing by 2.8 percent annually. If...