Stock X will pay a dividend of $0.70 and is expected to grow at a rate of 24% between t = 1 and t = 2, after which it will continue to grow at a constant rate of 21%. The expected rate of return on the stock is 22%, what should be the stock price? Hint: Draw a time line with growth rates and dividends indicated.
$61.53
$66.63
$71.72
$76.81
$63.24
Price=Present Value of
Dividends=0.70/1.22+0.70*1.24/1.22^2+0.70*1.24/1.22^2*1.21/(22%-21%)
=71.72131148
Stock X will pay a dividend of $0.70 and is expected to grow at a rate...
A stock is expected to pay a dividend of $8.25. These dividends are expected to grow at a constant rate of 4%. What is the stock price if the required rate of return on the stock is 8%? A. $82.50 B. $169.32 C. $206.25 D. $214.50
DMH Enterprise�s stock dividends are expected to grow at a rate of 25% for three years, after which dividends are expected to grow at a constant rate of 10% forever. The company recently paid a dividend of $2 and the required rate of return on the stock is 12%, what is the stock�s current price? $115.41 $128.54 $144.15 $160.54 You are charged with the valuation of Hurst Company�s stock. You have access to the following information: Hurst dividends are expected...
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