Question

what is the price of the stock?

Singing Fish Fine Foods has a current annual cash dividend policy of $3.75. The price of the stock is set to yield a return of 12%. What is the price of this stock if the dividend will be paid a. for 11 years? b. for 17 years? c. for 41 years? d. for 50 years? e. for 100 years? f. forever?

Answer 1

Annual dividend [..] = $ 3.75 Required return (Ke] = 12% a) for 11 years Price - Annual dividend x PVAF (2, ll years) = 3.75 X 5.93769913 - $ 22.27 b) for 17 years Price : Annual dividend x PVA(27. 917 years) = 3.75 X 7.11963 = $ 26.70 . c) for 41 years Price = Annual dividend x PVA (2). 4 years) = 3.75 X 8.25337204 - $ 30.95 a) fos so years Price Annual dividend x PVA(2%. ,soyears) = 3.75 X 8.30449849 - $31.14 e) for 100 years Price - Annual dividend x PVAF (02). , 100 years) = 3.75 X 8.33323356 $ 31.25 :) 6Амелия 3.75 = 25 - Annud dividend Requised satuen 0.12