The answer is
a)12.1%
A price of $10.81 would provide a return of 12%
Hence, a lower price i.e. $10.69 will provide return slightly higher than 12%
All other options are below 12%
Hence, the answer is a
Question 22 (1 point) What is the expected rate of return for this non-constant growth stock?...
What is the expected rate of return for this non-constant growth stock? • You have evaluated this stock using your required rate of return of 9% and found its intrinsic value (present value) to be $22.61 per share. . It is trading at (the current market price is) $25.16.
Soul Enterprises recently paid a dividend, D0, of $1. It expects to have non constant growth of 10% for 3 years followed by a constant rate of 6% thereafter. The firm’s required rate of return is 11%. What is the intrinsic value of the stock today? Wesson Technologies is expected to generate $100 million in FCF next year and FCF is expected to grow at a constant rate of 4% per year. Wesson has $200 million in debt, no preferred...
Non-Constant Growth Valuation: Divining Rod Water Resources Corp (DRWR) has experienced rapid growth that is expected to continue for the next several years. Specifically, high growth of 30% for the next three years, followed by constant growth of 6% thereafter is expected. The most recent dividend was $2.50 and the required rate of return is 14%. What is the intrinsic value of DRWR’s stock?
Non- constant growth A stock is expected to pay a dividend of $8 next year and this will increase by $2 for each of the following 3 years. after that, the company is expected to pay no dividends to its shareholders. if the required rate of return is 11% on this stock, what is the current stock price?
Expected rate of return QUESTION 13 Ellcon Inc preferred stock pays a constant annual dividend of $15.37 per share per share? Round your answer to two decimal places (Ex. 50.00) investors' required rate of return on this stock is 14.24%, what is the intrinsic value QUESTION 14
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Question 34 (1 point) A stock is expected to pay a dividend of $0.75 at the end of the next year. The required rate of return is 12.5%, and the expected constant growth rate is g -8.5% forever. What is the stock's intrinsic value? A) $19.22 OB) $18.28 C) $19.70 OD) $18.75 $17.82 Question 35.(1 point) Which one of the following bonds is the least sensitive to changes in market interest rates,...
6. Expected returns, dividends, and growth Aa Aa The constant growth valuation formula has dividends in the numerator. Dividends are divided by the difference between the required return and dividend growth rate as follows: D1 (rs -g) Po Which of the following statements best describes how a change in a firm's stock price would affect a stock's capital gains yield? O The capital gains yield on a stock that the investor already owns has an inverse relationship with the firm's...
Constant Growth Stock Valuation Investors require a 15% rate of return on Brooks Sisters' stock . What will be Brooks Sisters' stock value if the most recent dividend was $2 and if investors expect dividends to grow at a constant compound annual rate of (1) −5%, (2) 0%, (3) 5%, and (4) 10%? Using data from part a, what is the Gordon (constant growth) model value for Brooks Sisters' stock if the required rate of return is 15% and the expected...
The risk-free rate of return is 8%, the expected rate of return on the market portfolio is 15%, and the stock of Xyrong Corporation has a beta coefficient of 1.2. Xyrong pays out 40% of its earnings in dividends, and the latest earnings announced were $10 per share. Dividends were just paid and are expected to be paid annually. You expect that Xyrong will earn an ROE of 20% per year on all reinvested earnings forever. a. What is the...
C. Constant-growth model 933. A share of common stock has iust naid a dividend of $1.00. If the expected songs, run growth rate for this stock is 10 percent and if investors require a 19 percent rate return, what is the price of the stock? A. $7.49 B. $10.00 C. $35.21 D. $11.11 E. $12.22 Q34. The stock of Elsa Frozen Goods has a dividend yield of 7%. The dividends paid by this company are expected to grow at a...