Value of stock =Expected dividend/(required rate-growth rate)
Value of stock =(1.05*1.05)/(10%-5%)
Value of stock =22
4. The D.I.V. Company currently pays a dividend of $1.05 per share. If dividends are expected...
Nonconstant Dividend Growth Valuation A company currently pays a dividend of $1.8 per share (DO = $1.8). It is estimated that the company's dividend will grow at a rate of 22% per year for the next 2 years, and then at a constant rate of 7% thereafter. The company's stock has a beta of 1.1, the risk- free rate is 9%, and the market risk premium is 5.5%. What is your estimate of the stock's current price? Do not round...
A company currently pays a dividend of $4 per share (D0= $4). It is estimated that the company’s dividend will grow at a rate of 10% per year for the next 2 years, and then at a constant rate of 5% thereafter. The company’s stock has a beta of 6, the risk-free rate is 4% and the market risk premium is 2%. What is your estimate of the stock’s current price?
Ex 4) The CI Corp. has just paid a cash dividend of $2 per share. If investors require 16% return from investments such as this and the dividend is expected to grow at a steady 8% per year, what is the current value of the stock? What will the stock be worth in 5 years, given the same assumptions about the required return and the dividends? Answer: $27; $39.67Ex 5) A stock is selling for $40 per share currently. The...
A company currently pays a dividend of $4 per share (D0= $4). It is estimated that the company’s dividend will grow at a rate of 10% per year for the next 2 years, and then at a constant rate of 5% thereafter. The company’s stock has a beta of 1.6, the risk-free rate is 4% and the market risk premium is 2%. What is your estimate of the stock’s current price? Please show solution in Excel. Thank you!
A company currently pays a dividend of $4 per share (D0= $4). It is estimated that the company’s dividend will grow at a rate of 10% per year for the next 2 years, and then at a constant rate of 5% thereafter. The company’s stock has a beta of 6, the risk-free rate is 4% and the market risk premium is 2%. What is your estimate of the stock’s current price? Please solve in Excel. Thank you!
A company currently pays a dividend of $4 per share (D0= $4). It is estimated that the company’s dividend will grow at a rate of 10% per year for the next 2 years, and then at a constant rate of 5% thereafter. The company’s stock has a beta of 6, the risk-free rate is 4% and the market risk premium is 2%. What is your estimate of the stock’s current price? Please solve in Excel. Thank you!
Silicon Water Company currently pays a dividend of $1 per share and has a share price of $20. If the dividend was expected to grow at 20 percent for five years and at 10 percent per year thereafter. Now what is the firm's expected or required return on equity?
A company currently pays a dividend of $4 per share (D0 = $4). It is estimated that the company's dividend will grow at a rate of 25% per year for the next 2 years, then at a constant rate of 5% thereafter. The company's stock has a beta of 1.9, the risk-free rate is 3%, and the market risk premium is 6%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to...
River Street, Inc. currently pays a dividend of $2.50 per share. The firm’s cost of equity capital is 10%, and dividends are expected to grow at 6% per year for the foreseeable future (i.e. forever). Based on this information, what is the value of the firm’s stock today? What is the value in five years?
#1 Van Buren, Inc., currently pays $2.24 per share in dividends on its common stock. Dividends are expected to grow at 7.00 % per year forever. If you require a 13.00 % rate of return (i.e., the discount rate) on this investment, what value would you place on a share of Van Buren common stock? Assume that the current dividend was just paid. Answer format: Currency: Round to 2 decimal places # 2 Bad Investment Incorporated has "promised" investors to...