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Class Discussion Handout Q6. You are considering the purchase of a common stock that paid a...
2. You are considering the purchase of a common stock that paid a dividend of $2.00...
2. You are considering the purchase of a common stock that paid a dividend of $2.00 yesterday. You expect this stock to have a growth rate of 15 percent for the next 3 years, resulting in dividends of D1 $2.30, D2 $2.645, and D3 $3.04. The long-run normal growth rate after year 3 is expected to be 10 percent (that is, a constant growth rate after year 3 of 10% per year forever). If you require a 14 percent rate...
How did they get D? 2. You are considering the purchase of a common stock that paid a dividend of $2.00 yesterday. You e...
How did they get D?
2. You are considering the purchase of a common stock that paid a dividend of $2.00 yesterday. You expect this stock to have a growth rate of 15 percent for the next 3 years, resulting in dividends of D1 = $2.30, D2 = $2.645, and D3 = $3.04. The long-run normal growth rate after year 3 is expected to be 10 percent (that is, a constant growth rate after year 3 of 10% per year...
10. You are considering the purchase of a common stock that just paid a dividend of...
10. You are considering the purchase of a common stock that just paid a dividend of $2.00. You expect this stock to have a growth rate of 30 percent for the next 3 years, then to have a long-run normal growth rate of 10 percent thereafter. If you require a 15 percent rate of retum, how much should you be willing to pay for this stock? a. $97.50 b. $62.68 c. $82.46 d. $79.15 e. $71.27 11. You are given...
Please answer the following questions!! Thanks! You are considering the purchase of a common stock that...
Please answer the following questions!! Thanks! You are considering the purchase of a common stock that paid a dividend of $3.00 yesterday. You expect this stock to have a growth rate of 20 percent for the next 3 years and the long-run normal growth rate after year 3 is expected to be constant at 5 percent. If you require a 14 percent rate of return, the price per share that you should you be willing to pay for this stock?...
You are considering the purchase of a share of Alfa Growth, Inc. common stock. You expect...
You are considering the purchase of a share of Alfa Growth, Inc. common stock. You expect to sell it at the end of one year for $76.33 per share. You will also receive a dividend of $4.64 per share at the end of the next year. If your required return on this stock is 8.99 percent, what is the most you would be willing to pay for Alfa Growth, Inc. common stock now? Round the answer to two decimal places.
You are considering the purchase of a stock that reported earnings per share of $2.68 in...
You are considering the purchase of a stock that reported earnings per share of $2.68 in the most recent fiscal year. You expect the firm’s earnings to grow at 18% for the next ten years. After that you feel the growth in earnings will be 2.50% into the future. If you require a return of 15% on such an investment, what are you willing to pay for the shares today?
** need formula or excel formula please You are considering the purchase of a stock that...
** need formula or excel formula please You are considering the purchase of a stock that reported earnings per share of $2.68 in the most recent fiscal year. You expect the firm’s earnings to grow at 18% for the next ten years. After that you feel the growth in earnings will be 2.50% into the future. If you require a return of 15% on such an investment, what are you willing to pay for the shares today?
1. The relevant variable a financial manager uses to measure retums is A) net income determined...
1. The relevant variable a financial manager uses to measure retums is A) net income determined using generally accepted accounting principles. B) earnings per share minus dividends per share. C) cash flows. D) dividends. 2. You are considering the purchase of a common stock that paid a dividend of $2.00 yesterday. You expect this stock to have a growth rate of 15 percent for the next 3 years, resulting in dividends of D1 = $2.30, D2 = $2.645, and D3...
You are considering the purchase of a share of Edie's common stock. You expect to sell...
You are considering the purchase of a share of Edie's common stock. You expect to sell it at the end of 1 year for $32.00. You will also receive a dividend of $2.50 at the end of the year. Edie just paid a dividend of $2.25. If your required return on this stock is 12%, what is the most you would be willing to pay for it now? **** PLEASE EXPLAIN IN DETAILS. ALSO PLEASE EXPLAIN HOW YOU GET THE...
You are evaluating the purchase of Cool Toys, Inc. common stock that just paid a dividend...
You are evaluating the purchase of Cool Toys, Inc. common stock that just paid a dividend of $1.80. You expect the dividend to grow at a rate of 12%, indefinitely. You estimate that a required rate of return of 17.5% will be adequate compensation for this investment. Assuming that your analysis is correct, what is the most that you would be willing to pay for the common stock if you were to purchase it today?
2. You are considering the purchase of a common stock that paid a dividend of $2.00 yesterday. You expect this stock to have a growth rate of 15 percent for the next 3 years, resulting in dividends of D1 $2.30, D2 $2.645, and D3 $3.04. The long-run normal growth rate after year 3 is expected to be 10 percent (that is, a constant growth rate after year 3 of 10% per year forever). If you require a 14 percent rate...
How did they get D?
2. You are considering the purchase of a common stock that paid a dividend of $2.00 yesterday. You expect this stock to have a growth rate of 15 percent for the next 3 years, resulting in dividends of D1 = $2.30, D2 = $2.645, and D3 = $3.04. The long-run normal growth rate after year 3 is expected to be 10 percent (that is, a constant growth rate after year 3 of 10% per year...
10. You are considering the purchase of a common stock that just paid a dividend of $2.00. You expect this stock to have a growth rate of 30 percent for the next 3 years, then to have a long-run normal growth rate of 10 percent thereafter. If you require a 15 percent rate of retum, how much should you be willing to pay for this stock? a. $97.50 b. $62.68 c. $82.46 d. $79.15 e. $71.27 11. You are given...
You are considering the purchase of a share of Alfa Growth, Inc. common stock. You expect to sell it at the end of one year for $76.33 per share. You will also receive a dividend of $4.64 per share at the end of the next year. If your required return on this stock is 8.99 percent, what is the most you would be willing to pay for Alfa Growth, Inc. common stock now? Round the answer to two decimal places.
1. The relevant variable a financial manager uses to measure retums is A) net income determined using generally accepted accounting principles. B) earnings per share minus dividends per share. C) cash flows. D) dividends. 2. You are considering the purchase of a common stock that paid a dividend of $2.00 yesterday. You expect this stock to have a growth rate of 15 percent for the next 3 years, resulting in dividends of D1 = $2.30, D2 = $2.645, and D3...
You are evaluating the purchase of Cool Toys, Inc. common stock that just paid a dividend of $1.80. You expect the dividend to grow at a rate of 12%, indefinitely. You estimate that a required rate of return of 17.5% will be adequate compensation for this investment. Assuming that your analysis is correct, what is the most that you would be willing to pay for the common stock if you were to purchase it today?
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