Mariota Corp. just paid a dividend of $4.25 per share on its stock. The dividend growth...

Question

Question

Mariota Corp. just paid a dividend of $4.25 per share on its stock. The dividend growth rate is expected to be 3.25 forever a

Answer 1

Answer #1

Value of Stock = Next year dividend/(Discount rate-Growth rate) D14 DO*(1+g)^14 4.25*(1+0.0325) 14 6.6504307 P13 D14/(Ke-g) 6

Answer 2

Similar Homework Help Questions

Mariota Corp. just paid a dividend of $3.90 per share on its stock. The dividend growth...

Mariota Corp. just paid a dividend of $3.90 per share on its stock. The dividend growth rate is expected to be 3.6 forever and investors require a return of 12.8 percent on this stock. What will the stock price be in 13 years?
Mariota Corp. just paid a dividend of $3.45 per share on its stock. The dividend growth rate is expected to be 4.05 fore...

Mariota Corp. just paid a dividend of $3.45 per share on its stock. The dividend growth rate is expected to be 4.05 forever and investors require a return of 11.9 percent on this stock. What will the stock price be in 11 years?
1) A7X Corp. just paid a dividend of $1.30 per share. The dividends are expected to...

1) A7X Corp. just paid a dividend of $1.30 per share. The dividends are expected to grow at 30 percent for the next 9 years and then level off to a growth rate of 9 percent indefinitely. If the required return is 13 percent, what is the price of the stock today? 2) Burnett Corp. pays a constant $19 dividend on its stock. The company will maintain this dividend for the next 6 years and will then cease paying dividends...

TUV Inc., just paid a dividend of $4.5 per share on its stock. The growth rate...

TUV Inc., just paid a dividend of $4.5 per share on its stock. The growth rate in dividends is expected to be a constant 6 percent per year indefinitely. Investors require an 20 percent return on the stock for the first three years, then a 12 percent return for the next three years, and then an 9 percent return thereafter. What is the current share price? Answer to two decimals, carry intermediate calcs. to four decimals.
Sea Side, Inc., just paid a dividend of $1.96 per share on its stock. The growth...

Sea Side, Inc., just paid a dividend of $1.96 per share on its stock. The growth rate in dividends is expected to be a constant 3.1 percent per year indefinitely. Investors require a return of 25 percent on the stock for the first three years, then a 20 percent return for the next three years, and then a 18 percent return thereafter. What is the current share price? (Do not round intermediate calculations. Round your answer to 2 decimal places....
Rasheed Farm just paid a dividend of $2.65 on its stock. The growth rate in dividends...

Rasheed Farm just paid a dividend of $2.65 on its stock. The growth rate in dividends is expected to be a constant 4.5 percent per year indefinitely. Investors require a return of 15 percent for the first three years, a return of 13 percent for the next three years and a return of 11 percent thereafter. What is the current share price?

Stock Valuation Bretton, Inc., just paid a dividend of $3.15 on its stock. The growth rate in dividends is expected to...

Stock Valuation Bretton, Inc., just paid a dividend of $3.15 on its stock. The growth rate in dividends is expected to be a constant 4 percent per year, indefinitely. Investors require a 15 percent return on the stock for the first three years, a 13 percent return for the next three years, and then an 11 percent return thereafter. What is the current share price for the stock?
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 Grist Mill just paid a dividend of $3.46 per share on its stock. The dividends...

The Grist Mill just paid a dividend of $3.46 per share on its stock. The dividends are expected to grow at a constant rate of 4.5 percent per year, indefinitely. What will the price of this stock be 7 years from today if investors require an annual return of 13 percent? A. $55 B. $49 C. $43 D. $58

This morning you purchased a stock that just paid an annual dividend of $1.70 per share.

This morning you purchased a stock that just paid an annual dividend of $1.70 per share. You require a return of 9.5 percent and the dividend will increase at an annual growth rate of 2.6 percent. If you sell this stock in three years, what will your capital gain be? Multiple Choice $2.31 $2.60 $2.02 $2.66 Fowler is expected to pay a dividend of $1.53 one year from today and $1.68 two years from today. The company has a dividend payout ratio of 45 percent and...