Hargrave Ltd has just paid a dividend of $2.00 per share on its stock. The dividends...
Hargrave Ltd has just paid a dividend of $2.00 per share on its stock. The dividends are expected to grow at a constant 9% p.a. indefinitely. Calculate the current price if investors require a 14% p.a. return on Hargrave stock. What will the price be in 3 years? In 15 years?
Homework Answers
Using the Gordon Model
Situation 1 - Dividend is expected to grow @9% indefinitely
Price (Time 0) = Dividend(time 1)/Expected Rate of Return (ke) - Growth Rate(g)
=2(1.09)/0.14-0.09
=43.6
Situation 2 - Price in 3 years
Price (Time 3) = Dividend(time 4)/ ke - g
=2(1.09)^4/0.14-0.09
=2.8232/0.05
=56.46
Situation 3 - Price in 15 years
Price (Time 15) = Dividend (time 16)/ ke - g
=2(1.09)^16/0.14-0.09
=7.9406/0.05
=158.8122
Add Answer to:
Hargrave Ltd has just paid a dividend of $2.00 per share on its
stock. The dividends...
The Herjavec Co just paid a dividend of 2.00 per share on its stock. The dividends...
The
Herjavec Co just paid a dividend of 2.00 per share on its stock.
The dividends are expected to grow at a constant rate of 4 percent
per year indefinitely. Investors require a return of 12 percent on
the company's stock.
The Herjavec Co.just paid a dividend of $2.00 per share on its stock. The dividends are expected to grow at a constant rate of 4 percent per year indefinitely. Investors require a return of 12 percent on the company's...
The Napa Co. just paid a dividend of $3.15 per share on its stock. The dividends...
The Napa Co. just paid a dividend of $3.15 per share on its stock. The dividends are expected to grow at a constant rate of 5 percent per year indefinitely. If investors require a return of 12 percent on the stock, what is the current price? What will the price be in four years?
The Starr Co. just paid a dividend of $1.32 per share on its stock. The dividends...
The Starr Co. just paid a dividend of $1.32 per share on its stock. The dividends are expected to grow at a constant rate of 6 percent per year indefinitely. Required: (a) If investors require a 14 percent return on stock, what is the current price? (Do not include the dollar sign ($). Round your answer to 2 decimal places. (e.g., 32.16)) Current price $ (b) If investors require a 14 percent return on stock, what will the price be...
The Brennan Co. just paid a dividend of $2.50 per share on its stock. The dividends...
The Brennan Co. just paid a dividend of $2.50 per share on its stock. The dividends are expected to grow at a constant rate of 7% per year indefinitely. Brennan Co. investors require a 12% return on their stock. a. What is the current price of a share of Brennan Co. Stock? b. What will be the price of a share in of Brennan Co. Stock in 5 years? c. What will be the price of a share of Brennan...
The Stopperside Wardrobe Co. just paid a dividend of $1.45 per share on its stock. The...
The Stopperside Wardrobe Co. just paid a dividend of $1.45 per share on its stock. The dividends are expected to grow at a constant rate of 6 percent per year indefinitely. If investors require an 11 percent return on The Stopperside Wardrobe Co. stock, what is the current price? What will the price be in three years? In 15 years?
he Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.48 per share on its stock. The...
he Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.48 per share on its stock. The dividends are expected to grow at a constant rate of 6 percent per year indefinitely. a. If investors require a return of 12 percent on the company's stock, what is the current price? b. What will the price be in 14 years?
ABC Co.. just paid a dividend of $1.69 per share on its stock. The dividends are...
ABC Co.. just paid a dividend of $1.69 per share on its stock. The dividends are expected to grow at a constant rate of 7.2% per year indefinitely. If investors require an 12.2% return on ABC Co.. stock, answer the following: (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.) What will the price be in 15 years?
ABC Co.. just paid a dividend of $1.47 per share on its stock. The dividends are...
ABC Co.. just paid a dividend of $1.47 per share on its stock. The dividends are expected to grow at a constant rate of 6.1% per year indefinitely. If investors require an 11.1% return on ABC Co.. stock, answer the following: (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.) What will the price be in 15 years?
ABC Co. just paid a dividend of $1.55 per share on its stock. The dividends are...
ABC Co. just paid a dividend of $1.55 per share on its stock. The dividends are expected to grow at a constant role of 6,5% per year indefinitely. If investors require an 11.5% return on ABC Costock, answer the following: (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.) What will the price be in 15 years?
The Jackson-Timberlake Wardrobe 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 percent per year indefinitely.
The Jackson-Timberlake Wardrobe 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 percent per year indefinitely. If investors require a return of 10.5 percent on the stock, what is the current price? What will the price be in three years? In 15 years?
The
Herjavec Co just paid a dividend of 2.00 per share on its stock.
The dividends are expected to grow at a constant rate of 4 percent
per year indefinitely. Investors require a return of 12 percent on
the company's stock.
The Herjavec Co.just paid a dividend of $2.00 per share on its stock. The dividends are expected to grow at a constant rate of 4 percent per year indefinitely. Investors require a return of 12 percent on the company's...
ABC Co.. just paid a dividend of $1.69 per share on its stock. The dividends are expected to grow at a constant rate of 7.2% per year indefinitely. If investors require an 12.2% return on ABC Co.. stock, answer the following: (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.) What will the price be in 15 years?
ABC Co. just paid a dividend of $1.55 per share on its stock. The dividends are expected to grow at a constant role of 6,5% per year indefinitely. If investors require an 11.5% return on ABC Costock, answer the following: (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.) What will the price be in 15 years?
Most questions answered within 3 hours.
-
Which of the following is a provision of
NAFTA?
A.
Common accounting rules
B.
Adding new...
asked 13 minutes ago -
Need to do in Python? Can do in Javascript but not in Python
Write a function...
asked 28 minutes ago -
Industry: Telecommunications in India
Here, you need to discuss the sources of the growth pattern
and...
asked 1 hour ago -
Hydrobromic acid
dissolves solid iron according to the followiaung reaction:
Fe(s)+2HBr(aq)→
FeBr2(aq)+ H2(g)
Part A. What...
asked 3 hours ago -
Verify the following vector identity in SPHERICAL
COORDINATES.
div(curl(A)) = 0
asked 5 hours ago -
The work function (Φ) for a metal is 7.50×10-19 J.
What is the longest wavelength (nm)...
asked 6 hours ago -
1. Would the following procedural changes cause the
calculated mass percent Ni2+ ion in Ni(NH3)nCl2 to...
asked 7 hours ago -
1. Why does the voltage of the capacitor vary with frequency?
where does this missing voltage...
asked 8 hours ago -
p p please write each step out clearly
3. A manager of a company is considering...
asked 7 hours ago -
On October 1, Ebony Ernst organized Ernst Consulting; on October
3, the owner contributed $83,540 in...
asked 8 hours ago -
A.)As an electron moves through a region of space, its speed
decreases from 9.60 × 106...
asked 9 hours ago -
In java with the netbeans program do:
Through object programming
Create a class "ContadorP", which is...
asked 9 hours ago