ZuoTi.Pro
Question

National Advertising just paid a dividend of D0 = $0.75 per share, and that dividend is...

National Advertising just paid a dividend of D0 = $0.75 per share, and that dividend is expected to grow at a constant rate of 6.50% per year in the future. The company's beta is 0.8, the required return on the market is 10.50%, and the risk-free rate is 4.50%. What is the company's current stock price? Select the correct answer. a. $29.21 b. $28.53 c. $28.87 d. $29.55 e. $28.19

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

required return= risk-free rate +Beta*(market rate- risk-free rate )

=4.5+0.8*(10.5-4.5)

=9.3%

Current price=D1/(Required return-Growth rate)

=(0.75*1.065)/(0.093-0.065)

=$28.53(Approx).

0 0
Add a comment
Know the answer?
Add Answer to:
National Advertising just paid a dividend of D0 = $0.75 per share, and that dividend is...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • National Advertising just paid a dividend of D0 = $0.75 per share, and that dividend is...

    National Advertising just paid a dividend of D0 = $0.75 per share, and that dividend is expected to grow at a constant rate of 6.50% per year in the future. The company's beta is 0.9, the required return on the market is 10.50%, and the risk-free rate is 4.50%. What is the company's current stock price? Select the correct answer. a. $23.04 b. $22.14 c. $22.59 d. $23.49 e. $21.69

  • Schnusenberg Corporation just paid a dividend of D 0 = $0.75 per share, and that dividend...

    Schnusenberg Corporation just paid a dividend of D 0 = $0.75 per share, and that dividend is expected to grow at a constant rate of 6.50% per year in the future. The company's beta is 1.70, the required return on the market is 9.50%, and the risk-free rate is 4.50%. What is the company's current stock price? Do not round intermediate calculations. a. $9.74 b. $10.52 c. $12.29 d. $7.89 e. $7.40

  • Schnusenberg Corporation just paid a dividend of D 0 = $0.75 per share, and that dividend...

    Schnusenberg Corporation just paid a dividend of D 0 = $0.75 per share, and that dividend is expected to grow at a constant rate of 6.50% per year in the future. The company's beta is 1.70, the required return on the market is 9.50%, and the risk-free rate is 4.50%. What is the company's current stock price?  Do not round intermediate calculations. a. $7.40 b. $10.52 c. $7.89 d. $9.74 e. $12.29

  • El Taco Tote just paid a dividend of D0 = $1.75 per share, and that dividend...

    El Taco Tote just paid a dividend of D0 = $1.75 per share, and that dividend is expected to grow at a constant rate of 5.50% per year in the future. The company's beta is 1.50, the required return on the market is 9.50%, and the risk-free rate is 3.50%. What is the company's current stock price?

  • The Isberg Company just paid a dividend of $0.75 per share, and that dividend is expected...

    The Isberg Company just paid a dividend of $0.75 per share, and that dividend is expected to grow at a constant rate of 5.50% per year in the future. The company's beta is 1.65, the market risk premium is 5.00%, and the risk-free rate is 4.00%. What is the company's current stock price, Po? Do not round intermediate calculations. $10.08 C$11.72 C$13.83 C$12.66 C $13.60

  • Help 5 pts Kelso Corporation just paid a dividend of Do- $0.90 per share, and that...

    Help 5 pts Kelso Corporation just paid a dividend of Do- $0.90 per share, and that dividend is expected to grow at a constant rate of 6.50% per year in the future. The company's beta is 1.70, the required return on the market is 10.50%, and the risk-free rate is 4.50%. What is the company's current stock price? Your answer should be between 8.22 and 37.40, rounded to 2 decimal places, with no special characters. D Question 15 5 pts...

  • A company just paid a dividend of $1.95 per share, and that dividend is expected to...

    A company just paid a dividend of $1.95 per share, and that dividend is expected to grow at a constant rate of 4.50% per year in the future. The company's beta is 1.65, the market risk premium is 8.5%, and the risk-free rate is 5.50%. What is the company's current stock price? $12.72 $13.56 $14.53 $15.64 $16.94

  • A company has just paid a dividend of $ 3 per share, D0=$ 3 . It...

    A company has just paid a dividend of $ 3 per share, D0=$ 3 . It is estimated that the company's dividend will grow at a rate of 18 % percent per year for the next 2 years, then the dividend will grow at a constant rate of 7 % thereafter. The company's stock has a beta equal to 1.4, the risk-free rate is 4.5 percent, and the market risk premium is 4 percent. What is your estimate of the...

  • 17. Gummo Corporation just paid a dividend of $0.75 per share, and that dividend is expected...

    17. Gummo Corporation just paid a dividend of $0.75 per share, and that dividend is expected to grow at a constant rate of 6.5% per year. The company's beta is 0.95, the required return on the market is 10.5%, and the risk-free rate is 4.5%. What is the company's current stock price? a) 10.02 b)20.27 c)9.40 d)21.59 e)16.98

  • The Peter Inc just paid a dividend of $1.0 per share, and that dividend is expected...

    The Peter Inc just paid a dividend of $1.0 per share, and that dividend is expected to grow at a constant rate of 5.50% per year in the future. The company's beta is 1.15, the market risk premium is 5.00%, and the risk-free rate is 4.00%. What is Peter’s current stock price, P0?

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT