(1)A company’s shares have just paid a dividend of 5 pence per share. The market expects dividends to grow annually at a rate of 3%, and requires a return on the shares of 7%per annum. At what price will the shares be trading?(£1.2875)
(2)As (1), but dividends are expected to grow at 6% per annum for the next 3 years (so the t= 1dividend will be 5.3 pence etc.) and then remain at that level in perpetuity.
(1)A company’s shares have just paid a dividend of 5 pence per share. The market expects...
Apex Co. stock just paid $1.50 dividend per share. The market expects that the dividend will grow at 5% annually for the next 2 years and then 3% annually forever. Assuming a required return of 10%, how much is the present value of the stock?
Portman Industries just paid a dividend of $1.20 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 12.00% over the next year. After the next year, though, Portman's dividend is expected to grow at a constant rate of 2.40% per year. The risk free rate is 3.00%, the market risk premium is 3.60% and Portman's beta is 1.10. Assuming that the market is at equalibrium, complete the table. What...
The RBCAB Corporation just paid a dividend of $1.13 per share. The company's CFO expects that the dividend will remain at that level for three years. After year three, it is expected that the dividend will grow at a rate of 4% indefinitely. If the required return is 10%, what is the value of stock today? At 5 years? At 10 years?
The RBCAB Corporation just paid a dividend of $1.13 per share. The company's CFO expects that the dividend will remain at that level for three years. After year three, it is expected that the dividend will grow at a rate of 4% indefinitely. If the required return is 10%, what is the value of stock today? At 5 years? At 10 years?
Contact Corporation just paid a dividend of $1.50 per share. The company expects that the dividend will grow at a rate of 10% for the next two years. After year two it is expected that the dividend will decline at a rate of 3% indefinitely. If the required return is 12%, what is the value of a share of stock?
If Magma Ventures just paid an annual dividend of $3.82 a share, expects dividends will grow 13 percent a year for the next 3 years and expects to increase the dividend by 3.2 percent annually forever thereafter. The required return is 6.4 percent. What is the price of this stock?
Portman Industries just paid a dividend of $1.92 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 20.00% over the next year. After the next year, though, Portman's dividend is expected to grow at a constant rate of 4.00% per year. The risk-free rate (rRF) is 5.00%, the market risk premium (RPM) is 6.00%, and Portman's beta is 1.70. Term Value Dividends one year from now (D1) Horizon value...
: Common Share It pays annual dividends and a $4 dividend was paid yesterday. As per the market consensus, the company’s dividend is expected to decrease by 10% per annum in the first two years. Then its dividend will grow by 25% for next three years. After that, the dividend growth rate will become 5% p.a. constant till foreseeable future. Peters required rate of return on this investment is 20% per annum
Problem1: The XYZ 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% per year indefinitely. Assume investorsrequire a return of 10.5 % on the XYZ Co. stock. What will the price be in 3 years? Show yourwork/calculations Problem2: The ABCorp. paid an annual dividend of $1.37 a share last month. Today, the company announced that future dividends will be increasing by 2.8 percent annually. If...