Question

P10-5 (similar to) Question Help (Common stock valuation) The common stock of NCP paid $1.37 in dividends last year. Dividend

0 0
Add a comment Improve this question Transcribed image text
Answer #1

a)

value = dividend next year/(Required return - growth rate)

= 1.37 * (1+5%)/(0.074-0.05)

= 59.94

b)

Yes

Add a comment
Know the answer?
Add Answer to:
P10-5 (similar to) Question Help (Common stock valuation) The common stock of NCP paid $1.37 in...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Question 7: (10 points). (Common stock valuation) The common stock of NCP paid $1.29 in dividends...

    Question 7: (10 points). (Common stock valuation) The common stock of NCP paid $1.29 in dividends last year. Dividends are expected to grow at an annual rate of 6.00 percent for an indefinite number of years. (Round to the nearest cent.) a. If your required rate of return is 8.70 percent, the value of the stock for you is:$ b. You (should/should not) make the investment if your expected value of the stock is (greater/less) than the current market price...

  • (Common stock valuation) The common stock of NCP paid $1.25 in dividends last year. Dividends are...

    (Common stock valuation) The common stock of NCP paid $1.25 in dividends last year. Dividends are expected to grow at an annual rate of 5.90 percent for an indefinite number of years. a. If NCP's current market price is $24.97 per share, what is the stock's expected rate of return? b. If your required rate of return is 7.9 percent, what is the value of the stock for you? c. Should you make the investment? a. If NCP's current market...

  • ​(Common stock valuation​) The common stock of NCP paid ​$2.25 in dividends last year. Dividends are...

    ​(Common stock valuation​) The common stock of NCP paid ​$2.25 in dividends last year. Dividends are expected to grow at an annual rate of 5.50 percent for an indefinite number of years. a. If​ NCP's current market price is ​$22.72 per​ share, what is the​ stock's expected rate of​ return? b. If your required rate of return is 7.5 ​percent, what is the value of the stock for​ you? c. Should you make the​ investment? a. If​ NCP's current market...

  • The common stock of NCP paid $1.42 in dividends last year. Dividends are expected to grow...

    The common stock of NCP paid $1.42 in dividends last year. Dividends are expected to grow at an annual rate of 5.3 percent for an indefinite number of years. a. If your required rate of return is 7.6 percent, what is the value of the stock for​ you? b. Should you make the​ investment? ---------------------------------------------------------------------------------------------------------------------------------------------------------------- a. If your required rate of return is 7.6​ percent, the value of the stock for you is ​$________ ​(Round to the nearest​ cent.) b....

  • The common stock of NCP paid $1.42 in dividends last year. Dividends are expected to grow...

    The common stock of NCP paid $1.42 in dividends last year. Dividends are expected to grow at an annual rate of 9.00 percent for an indefinite number of years. a. If your require rate is 11.60 percent, what is the value of the stock for you? b. Should you make the investment? a. If your required rate of return is $11.60 percent, the value of the stock for you is$.

  • common stock valuation

    (Common stock valuation) The common stock of NCP paid $1.32 in dividends last year. Dividends are expected to grow at an 8% annual rate for an indefinite number ofyears.a. If NCP’s current market price is $23.50 per share, what is the stock’s expected rate of return?b. If your required rate of return is 10.5%, what is the value of the stock for you?c. Should you make the investment?

  • The common stock of NCP paid ​$1.45 in dividends last year. Dividends are expected to grow...

    The common stock of NCP paid ​$1.45 in dividends last year. Dividends are expected to grow at an annual rate of 6.40 percent for an indefinite number of years. a. If​ NCP's current market price is ​$23.05 per​ share, what is the​ stock's expected rate of​ return? b. If your required rate of return is 8.4 ​percent, what is the value of the stock for​ you? c. Should you make the​ investment?

  • P10-7 (similar to) Question Help (Common stock valuation) Wayne, Inc.'s outstanding common stock is currently selling...

    P10-7 (similar to) Question Help (Common stock valuation) Wayne, Inc.'s outstanding common stock is currently selling in the market for $28. Dividends of $3.33 per share were paid last year, return on equity is 24 percent, and its retention rate is 24 percent. a. What is the value of the stock to you, given a required rate of return of 17 percent? b. Should you purchase this stock? a. Given a required rate of return of 17 percent, the value...

  • P10-12 (similar to) Question Help (Related to Checkpoint 10.2) (Relative valuation of common stock) Using the...

    P10-12 (similar to) Question Help (Related to Checkpoint 10.2) (Relative valuation of common stock) Using the P/E ratio approach to valuation, calculate the value of a share of stock under the following conditions • the investor's required rate of return is 12 percent, • the expected level of earnings at the end of this year (E) is $8, • the firm follows a policy of retaining 40 percent of its earnings, • the return on equity (ROE) is 12 percent,...

  • The common stock of NCP paid $1.32 in dividends last year. Dividends are expected to grow...

    The common stock of NCP paid $1.32 in dividends last year. Dividends are expected to grow at an 8 percent annual rate for an indefinite number of years. If NCP's current market price is $23.50 per share, what is the stocks expected rate of return?

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT