Question

please show how to do this on a financial calculator, thank you! What would you pay...

please show how to do this on a financial calculator, thank you!

What would you pay today for a stock that is expected to make a $2 dividend in one year if the expected dividend growth rate is 5% and you require a 12% return on your investment?

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

Market capitalisation rate = ke = D1 = Price = 01/(ke-g) 12.00% 5.00% $2.000 $28.57 2.0/(12%-5%)

Add a comment
Know the answer?
Add Answer to:
please show how to do this on a financial calculator, thank you! What would you pay...
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
  • Hi, Would you show me how to solve #16 problem ONLY using a financial calculator? Thank...

    Hi, Would you show me how to solve #16 problem ONLY using a financial calculator? Thank you very much in advance! no vucnil Share thereafter. If the required return on this SIUCK IS T... price? 16. Nonconstant Dividends [LO1] Maloney, Inc., has an odd dividend policy to company has just paid a dividend of $3.50 per share and has announced that it increase the dividend by $4.50 per share for each of the next five years, and then never pay...

  • Can you please show step by step and also how to do it on HP financial...

    Can you please show step by step and also how to do it on HP financial calculator. Your firm recently paid a dividend of $4 to common stockholders. Dividends are expected to grow at 8% per year for the foreseeable future. The current stock price is $54. Preferred stock would pay a 12% dividend on a $50 par value. The stocks would sell for par value less flotation costs of $2 per share. Wellington has a marginal tax rate of...

  • How much would you pay for a share of stock paying a dividend (cash payout C)...

    How much would you pay for a share of stock paying a dividend (cash payout C) of $4 to be paid in one year, a known selling price in one year (P) of $50, and expected return (R) of similar assets of 4%? You would pay $ (Round your response to the nearest penny) Consider the one-period valuation model for computing stock prices. Suppose you are considering buying Wal-Mart stock, which has a price of $75.06 and a dividend of...

  • Please solve using financial calculator only and show work. Thank you. 28. Your brother has asked you to help him with c...

    Please solve using financial calculator only and show work. Thank you. 28. Your brother has asked you to help him with choosing an investment. He has $5,200 to invest today for a period of five years. You identify a bank CD that pays an interest rate of 3.60 percent with the interest being paid quarterly. What will be the value of the investment in five years? 29. Tim has loaned money to his brother at an interest rate of 6...

  • please use excel formula to show work, Thank You Maloney, Inc., has an odd dividend policy....

    please use excel formula to show work, Thank You Maloney, Inc., has an odd dividend policy. The company has just paid a dividend of $3.50 per share and has announced that it will increase the dividend by $4.50 per share for each of the next five years, and then never pay another dividend. If you require a return of 11 percent on the company's stock, how much will you pay for a share today? Current dividend Dividend growth Required return...

  • Can you show me how to solve this on a financial calculator? I do not understand...

    Can you show me how to solve this on a financial calculator? I do not understand why D2 (2.1242) is the horizon but we use D3 to calculate the horizon value?? Holt Enterprises recently paid a dividend, Do, of $1.50. It expects to have nonconstant growth of 19% for 2 years followed by a constant rate of 7% thereafter. The firm's required return is 18%. a. How far away is the horizon date? I. The terminal, or horizon, date is...

  • Please answer the 3 empty boxes. Thank you! Also, show your work on how you got...

    Please answer the 3 empty boxes. Thank you! Also, show your work on how you got the calculations. Quantitative Problem 11 Hubbard Industries just paid a common dividend, Do, of $1.50. It expects to grow at a constant rate of 3% per year. If investors require a 11% return on equity, what is the current price of Hubbard's common stock? Do not round Intermediate calculations. Round your answer to the nearest cent. per share Zero Growth Stocks: The constant growth...

  • Please show the steps to finding the answer using a *Financial Calculator*! Thank you. 1) The...

    Please show the steps to finding the answer using a *Financial Calculator*! Thank you. 1) The U.S. Treasury issued a 7-year maturity, $1000 par value bond exactly 3 years ago. The bond pays a nominal coupon rate of 12%. The coupon payments are paid semi-annually The most recent coupon payment (the sixth coupon payment) was made yesterday. Your required rate of return from the bond is 10% per year What is the price of the bond today? If the bond...

  • Can you please show the steps of how to solve (in excel preferred) please, thank you!...

    Can you please show the steps of how to solve (in excel preferred) please, thank you! Common stock value-Variable growth Lawrence Industries' most recent annual dividend was $1.82 per share (Do = $1.82), and the firm's required return is 12%. Find the market value of Lawrence's shares when dividends are expected to grow at 8% annually for 3 years, followed by a 4% constant annual growth rate in years 4 to infinity

  • Solve the problem. Show your work and equations! Please do not show screenshots of Excel as...

    Solve the problem. Show your work and equations! Please do not show screenshots of Excel as your work shown. 5. The company stock increases dividend by 5% each year and the expected dividend in 5 years is $5. Analysts expect that investors would require 10% return on this stock. The company will cease paying dividend after the 5th dividend (dividend in year 5). That is, the firm will pay 5 dividends annually and from year 6 shareholders will not receive...

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