ZuoTi.Pro
Question

If Basalt Hardware plans to pay an annual dividend of 0.8 a share at the end...

If Basalt Hardware plans to pay an annual dividend of 0.8 a share at the end of this year, expects to pay dividends forever and expects to increase the dividend by 6.9 percent annually. Stocks similar to Basalt Hardware have an expected return of 9.2 percent. What is the current value of this stock?

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

The current value of this stock:-

=Annual dividend/(rate-growth rate)

=0.8/(9.2%-6.9%)

=34.78

0 0
Add a comment
Know the answer?
Add Answer to:
If Basalt Hardware plans to pay an annual dividend of 0.8 a share at the end...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

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

  • Casino Inc. expects to pay a dividend of $4 per share at the end of year...

    Casino Inc. expects to pay a dividend of $4 per share at the end of year 1 (Div1) and these dividends are expected to grow at a constant rate of 5 percent per year forever. If the required rate of return on the stock is 15 percent, what is the current value of the stock today?

  • Slow Growth Company just paid an annual dividend of $1.65 a share. The firm expects to...

    Slow Growth Company just paid an annual dividend of $1.65 a share. The firm expects to pay dividends forever and to increase the dividend by 3 percent annually. What is the expected value of this stock five years from now if the discount rate is 14%? Is it A$17.23, B.$19.88, C.$18.25, D.$17.91?

  • If Magma Ventures just paid an annual dividend of $3.82 a share, expects dividends will grow...

    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?

  • Pablo owns one share of stock of Blue Eagle Media and one share of stock of...

    Pablo owns one share of stock of Blue Eagle Media and one share of stock of Violet Sky Consulting. The total value of his holdings is 254.72 dollars. Both stocks pay annual dividends that are expected to continue forever. The expected return for Blue Eagle Media stock is 15.57 percent and its annual dividend is expected to remain at 9.38 dollars forever. What is the expected return for Violet Sky Consulting stock if its next dividend is expected to be...

  • Miller Brothers Hardware paid an annual dividend of $1.55 per share last month. Today, the company...

    Miller Brothers Hardware paid an annual dividend of $1.55 per share last month. Today, the company announced that future dividends will be increasing by 3.40 percent annually. If you require a 8.7 percent rate of return, how much are you willing to pay to purchase one share of this stock today? Teder Corporation stock currently sells for $100 per share. The market requires a 12 percent return on the firm's stock. If the company maintains a constant 6 percent growth...

  • 1) Firm ABC is going to pay an annual dividend of $2.00 per share next year....

    1) Firm ABC is going to pay an annual dividend of $2.00 per share next year. Management just announced that future dividends will increase by 2 percent annually. What is the amount of the expected dividend in year 5? 2) Firm ABC is going to pay an annual dividend of $2.00 per share next year. Management just announced that future dividends will increase by 5 percent annually in the first two years and 2 percent annually afterwards. What is the...

  • Miller Brothers Hardware paid an annual dividend of $0.95 per share last month. Today, the company...

    Miller Brothers Hardware paid an annual dividend of $0.95 per share last month. Today, the company announced that future dividends will be increasing by 2.6 percent annually. If you require a 13 percent rate of return, how much are you willing to pay to purchase one share of this stock today?

  • A stock is expected to pay annual dividends forever. The first dividend is expected in 1...

    A stock is expected to pay annual dividends forever. The first dividend is expected in 1 year and all subsequent annual dividends are expected to grow at a constant rate annually. The dividend expected in 2 years from today is 19.55 dollars and the dividend expected in 13 years from today is expected to be 30.03 dollars. What is the dividend expected to be in 8 years from today? Number If 1) the expected return for Litchfield Design stock is...

  • New Gadgets, Inc., currently pays no dividend but is expected to pay its first annual dividend of $5.05 per share...

    New Gadgets, Inc., currently pays no dividend but is expected to pay its first annual dividend of $5.05 per share exactly 10 years from today. After that, the dividends are expected to grow at 3.8 percent forever. If the required return is 11.6 percent, what is the price of the stock today? Multiple Choice $21.61 $64.74 $46.28 $28.13 42411 20 of 20 <Prev Next Help Save & Exit Submit Brickhouse is expected to pay a dividend of $2.55 and $2.22...

  • Miller Brothers Hardware paid an annual dividend of $1.75 per share last month. Today, the company...

    Miller Brothers Hardware paid an annual dividend of $1.75 per share last month. Today, the company announced that future dividends will be increasing by 3.00 percent annually. If you require a 8.7 percent rate of return, how much are you willing to pay to purchase one share of this stock today? $29.87 O $58.33 O $60.08 O $31.62 O $33.37

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