ZuoTi.Pro
Question

A stock current pays an annual dividend of $10 per share per year. The dividend is expected to grow 10% annually. Using the d
business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Stock price D1:(n-g) Here, Expected dividend (D1) Required return (r) Growth rate (g) 11 =10*(1+10%) 14% 10% Stock price $ 27

*Please rate thumbs up

0 0
Add a comment
Know the answer?
Add Answer to:
A stock current pays an annual dividend of $10 per share per year. The dividend is...
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

  • SCI just paid a dividend (Do) of $2.88 per share, and its annual dividend is expected...

    SCI just paid a dividend (Do) of $2.88 per share, and its annual dividend is expected to grow at a constant rate (g) of 6.00% per year. If the required return (rs) on SCI's stock is 15.00%, then the intrinsic value of scis shares is per share. Which of the following statements is true about the constant growth model? O When using a constant growth model to analyze a stock, if an increase in the growth rate occurs while the...

  • Super Carpeting Inc. (SCI) just paid a dividend (D₀) of $3.12 per share, and its annual dividend is expected to grow at...

    Super Carpeting Inc. (SCI) just paid a dividend (D₀) of $3.12 per share, and its annual dividend is expected to grow at a constant rate (g) of 6.50% per year. If the required return (rss) on SCI’s stock is 16.25%, then the intrinsic value of SCI’s shares is      per share. Which of the following statements is true about the constant growth model? When using a constant growth model to analyze a stock, if an increase in the required rate of...

  • Nonconstant Dividend Growth Valuation A company currently pays a dividend of $1.8 per share (DO =...

    Nonconstant Dividend Growth Valuation A company currently pays a dividend of $1.8 per share (DO = $1.8). It is estimated that the company's dividend will grow at a rate of 22% per year for the next 2 years, and then at a constant rate of 7% thereafter. The company's stock has a beta of 1.1, the risk- free rate is 9%, and the market risk premium is 5.5%. What is your estimate of the stock's current price? Do not round...

  • A company's stock pays an annual dividend that is expected to increase by 9% annually. The...

    A company's stock pays an annual dividend that is expected to increase by 9% annually. The stock commands a market rate of return of 12% and sells for $60.50 a share. What is the expected amount of the next dividend to be paid on the stock? Battery Co. will pay an annual dividend of $2.08 a share on its common stock next year. Last week, the company paid a dividend of $2.00 a share. The company adheres to a constant...

  • Firm A just paid $2.50 per share and the current stock price is $36.00.... 1. Firm...

    Firm A just paid $2.50 per share and the current stock price is $36.00.... 1. Firm A just paid $2.5 per share, and the current stock price on the market is $36.00. The beta of this stock is 1.2, and the risk-free rate is 2%. and the market return is 10%. You expect that the long term growth rate of this dividend would be 4%. What is the value of this stock? 2. From Bloomberg, you got the following information....

  • A stock expects to pay a dividend of $4.07 per share next year. The dividend is...

    A stock expects to pay a dividend of $4.07 per share next year. The dividend is expected to grow at 25 percent per year for four years followed by a constant dividend growth rate of 6 percent per year in perpetuity. What is the expected stock price per share 10 years from today, if the required return is 13 percent? A. $177 B. $190 CC. $201 CD. $163

  • 5. Constant growth stocks Aa Aa SCI just paid a dividend (Do) of $1.44 per share,...

    5. Constant growth stocks Aa Aa SCI just paid a dividend (Do) of $1.44 per share, and its 3.00% per year. If the required return (r.) on SCI's stock is 7.50%, then the intrinsic value of SCI's shares is annual dividend is expected to grow at a constant rate (g) of per share. Which of the following statements is true about the constant growth model? O When using a constant growth model to analyze a stock, if an increase in...

  • A stock expects to pay a dividend of $3.72 per share next year. The dividend is...

    A stock expects to pay a dividend of $3.72 per share next year. The dividend is expected to grow at 25 percent per year for three years followed by a constant dividend growth rate of 4 percent per year in perpetuity. What is the expected stock price per share 5 years from today, if the required return is 12 percent?

  • QUESTION 11 Quixy Corp is expected to pay a dividend next year of $5.3 per share....

    QUESTION 11 Quixy Corp is expected to pay a dividend next year of $5.3 per share. The dividend is expected to grow at a constant rate of 4% per year if Quixy Corp stock is selling for $59.37 per share, what is the stockholders' expected rate return? Submit your answer as a percentage and round to two decimal places (Ex 0.00%) QUESTION 12 Elicon Inc. preferred stock pays a constant annual dividend of $10.46 per share. If investors' required rate...

  • : Common Share It pays annual dividends and a $4 dividend was paid yesterday. As per...

    : Common Share It pays annual dividends and a $4 dividend was paid yesterday. As per the market consensus, the company’s dividend is expected to decrease by 10% per annum in the first two years. Then its dividend will grow by 25% for next three years. After that, the dividend growth rate will become 5% p.a. constant till foreseeable future. Peters required rate of return on this investment is 20% per annum

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