You’ve collected the following information from your favorite financial website.
52-Week Price | Stock (Div) | Div Yld % |
PE Ratio |
Close Price |
Net Chg |
|
Hi | Lo | |||||
77.40 | 10.43 | Palm Coal .36 | 2.6 | 6 | 13.90 | –.24 |
55.81 | 33.42 | Lake Lead Grp 1.54 | 3.8 | 10 | 40.43 | –.01 |
130.93 | 69.50 | SIR 2.00 | 2.2 | 10 | 88.97 | 3.07 |
50.38 | 14.09 | DR Dime .94 | 6.0 | 6 | 15.57 | –.26 |
35.00 | 20.74 | Candy Galore .32 | 1.5 | 28 | ?? | .18 |
According to your research, the growth rate in dividends for DR
Dime for the previous 10 years has been negative 14 percent.
If investors feel this growth rate will continue, what is the
required return for DR Dime stock? (A negative answer
should be indicated by a minus sign. Do not round intermediate
calculations and enter your answer as a percent rounded to 2
decimal places, e.g., 32.16.)
Required return
%
Required return for DR Dime Stock
Here, we’ve Current Year Dividend (D0) = $0.94 per share
Dividend Growth Rate (g) = -14.00%
Current Share Price (P) = $15.57 per share
Dividend in Next Year (D1)
Dividend in Next Year (D1) = D0 x (1 + g)
= $0.94 x (1 – 0.14)
= $0.94 x 0.86
= $0.8084 per share
As per the Discounted cash flow method, the required return for the stock is calculated as follows
Required return for the stock = [D1 / P0] + g
= [$0.8084 / $15.57] – 0.14
= 0.0519 – 0.14
= -0.0881 or
= -8.81% (Negative)
“Hence, the required return for DR Dime stock will be -8.81% (Negative)”
You’ve collected the following information from your favorite financial website. 52-Week Price Stock (Div) Div Yld...
You’ve collected the following information from your favorite financial website. 52-Week Price Stock (Div) Div Yld % PE Ratio Close Price Net Chg Hi Lo 77.40 10.43 Palm Coal .36 2.6 6 13.90 –.24 55.81 33.42 Lake Lead Grp 1.54 3.8 10 40.43 –.01 130.93 69.50 SIR 2.00 2.2 10 88.97 3.07 50.27 13.98 DR Dime .83 5.4 6 15.46 –.26 35.00 20.74 Candy Galore .32 1.5 28 ?? .18 According to your research, the growth rate in...
You've collected the following information from your favorite financial website. 52-Week Price Div Yld % 2.6 PE Ratio Lo 10 Hi 77.40 55.81 130.93 50.40 35.00 10.43 33.42 69.50 14.11 20.74 Stock (Div) Palm Coal 36 Lake Lead Grp 1.54 SIR 2.00 DR Dime.96 Candy Galore 32 3.8 22 Close Price 13.90 40.43 88.97 15.59 ?? Net Chg - 24 -01 3.07 - 26 18 10 28 According to your research, the growth rate in dividends for DR Dime for...
You've collected the following information from your favorite financial website. 52-Week Price Hi 77.40 55.81 130.93 50.35 35.00 Lo 10.43 33.42 69.50 14.06 20.74 Stock (Div) Palm Coal.36 Lake Lead Grp 1.54 SIR 2.00 DR Dime .91 Candy Galore .32 Div Yld % 2.6 3.8 2.2 5.9 1. 5 PE Ratio 6 10 10 6 2 8 Close Price 13.90 40.43 88.97 15.54 ?? Net Chg -.24 -.01 3.07 -.26 18 According to your research, the growth rate in dividends...
You’ve collected the following information from your favorite financial website. 52-Week Price Stock (Div) Div Yld % PE Ratio Close Price Net Chg Hi Lo 77.8 10.47 Palm Coal .40 2.8 6 14.30 –.24 55.81 33.42 Lake Lead Grp 1.54 3.8 10 40.43 –.01 130.93 69.50 SIR 2.00 2.2 10 88.97 3.07 50.24 13.95 DR Dime .80 5.2 6 15.43 –.26 35.00 20.74 Candy Galore .32 1.5 28 ?? .18 According to your research, the growth rate in...
You've collected the following information from your favorite financial website. 52-Week Price PE Ratio Hi 77.40 55.81 130.93 50.41 35.00 Lo 10.43 33.42 69.50 14.12 20.74 Stock (Div) Palm Coal.36 Lake Lead Grp 1.54 SIR 2.00 DR Dime.97 Candy Galore.32 Div Yld % 2.6 3.8 2.2 6.2 1.5 10 10 6 28 Close Price 13.90 40.43 88.97 15.60 ?? Net Chg -24 -.01 3.07 -26 18 According to your research, the growth rate in dividends for DR Dime for the...
Chapter 7, Question #9 You've collected the following information from your favorite financial website. 52-Week Price PE Ratio points 8 01:29:14 Hi 77.40 55.81 130.93 50.43 35.00 Lo 10.43 33.42 69.50 14.14 20.74 Stock (Div) Palm Coal.36 Lake Lead Grp 1.54 SIR 2.00 DR Dime.99 Candy Galore.32 Div Yld % 2.6 3.8 2.2 6.3 1.5 10 10 Close Price 13.90 40.43 88.97 15.62 ?? Net Chg -24 -.01 3.07 -26 18 Skipped 28 eBook According to your research, the growth...
You've collected the following information from your favorite financial website. 52-Week Price Div Yld % 2.6 3.8 77.40 55.81 130.93 50.24 35.30 Lo 10.43 33.42 69.50 13.95 20.77 Stock (Div) Palm Coal.36 Lake Lead Grp 1.54 SIR 2.00 DR Dime.80 Candy Galore 0.35 PE Close Net Ratio Price Chg 6 13.90 - 24 10 40.43 -01 10 88.97 3.07 6 15.43 - 26 28 ?? 18 5.2 1.5 a. Using the dividend yield, calculate the closing price for Candy Galore...
You’ve collected the following information from your favorite financial website. 52-Week Price Stock (Div) Div Yld % PE Ratio Close Price Net Chg Hi Lo 77.40 10.43 Palm Coal .36 2.6 6 13.90 –.24 56.21 33.82 Lake Lead Grp 1.94 4.8 10 40.83 –.01 130.93 69.50 SIR 2.00 2.2 10 88.97 3.07 50.24 13.95 DR Dime .80 5.2 6 15.43 –.26...
You’ve collected the following information from your favorite financial website. 52-Week Price Stock (Div) Div Yld % PE Ratio Close Price Net Chg Hi Lo 77.40 10.43 Palm Coal 0.36 2.6 6 13.90 –0.24 55.81 33.42 Lake Lead Grp 1.54 3.8 10 40.43 –0.01 131.03 70.00 SIR 2.50 2.8 10 89.07 3.07 50.24 13.95 DR Dime 0.80 5.2 6...
You've collected the following information from your favorite financial website, 52-Week Price Yld PE Close Net Stock (Div) % Ratio Price Chg 77.40 10.43 Palm Coal 36 2.6 6 13.90 -24 55.81 33.42 Lake Lead Grp 1.54 3.8 10 40.43 -01 130.93 69.50 SIR 2.00 2.2 10 88.97 3.07 50.24 13.95 DR Dime .80 5.2 6 15.43 - 26 36.40 20.88 Candy Galore 0.46 1.5 28 ?? 18 Hi Lo a. Using the dividend yield, calculate the closing price for...