Statement showing Computations | |
Particulars | Amount |
P2 = D3/(ke-g) | |
Where P0 is the price | |
Ke is the required return | 14.80% |
g is the growth rate | 8.00% |
D3 is dividend at end of year 3 | 1.65 |
P2 = 1.65/(14.80% - 8%) | |
P2 = 1.65/6.8% | |
P2 = 24.26 | |
Stock price = 24.26*(1/1.148)^2 | 18.41 |
Investors require a return of 14.8% per year to hold a stock. The stock currently does...
Investors require a return of 14.8% per year to hold a stock. The stock currently does not pay any dividends and is expected to begin paying a dividend of $1.65 in 3 years from now, then the dividends are expected to grow forever at a constant rate of 8.0%. What’s the stock price? A) $15.72 B) $16.05 C) $18.41 D) $17.34 E) $13.74
Ex 4) The CI Corp. has just paid a cash dividend of $2 per share. If investors require 16% return from investments such as this and the dividend is expected to grow at a steady 8% per year, what is the current value of the stock? What will the stock be worth in 5 years, given the same assumptions about the required return and the dividends? Answer: $27; $39.67Ex 5) A stock is selling for $40 per share currently. The...
Suppose Company B is currently paying a cash dividend of $3 per share. Investors require a 14% return. If the dividend is expected to grow at a steady rate of 9% per year. What is the predicted stock price of this company 7 years from now? 1) $120.55 2) $122.55 3) $118.55 4) $121.55 5) $119.55
Hayworth Industries does not currently pay dividends. However, investors expect that, in 4 years, Hayworth will pay its first dividend of $ 2.08 per share and will continue to grow at 12% per year forever. If investors require a 13% annual return on the stock, what is the current price?
The Peterman Company does not currently pay dividends. However, investors expect that, in 6 years, Peterman will pay its first dividend of $1.51 per share and will continue to grow at 10% per year forever. If investors require a 13% annual return on the stock, what is the current price? The current price of the stock is $ . (Round to the nearest cent.)
3.The stock in Up-Towne Movers is selling for $47.20 per share. Investors have a required return of 9.8 percent and expect the dividends to grow at 4.1 percent indefinitely. What was the dividend the company just paid? 4.CDB stock is currently priced at $72. The company will pay a dividend of $4.25 next year and investors require a return of 10.4 percent on similar stocks. What is the dividend growth rate on this stock?
Microsoft Corp. will pay a dividend of $2.04 per share next year. Investors anticipate that the annual dividends will grow by 2% per year forever, and they require an 12% discount rate. Calculate the value of the stock.
CDB stock is currently priced at $71. The company will pay a dividend of $5.13 next year and investors require a return of 11.5 percent on similar stocks. What is the dividend growth rate on this stock? 03:41:04 Multiple Choice eBook Ο Print Ο Ο Ο Ο Braxton's Cleaning Company stock is selling for $30.00 per share based on a required return of 9.5 percent. What is the the next annual dividend if the growth rate in dividends is expected...
Dynasty Corp. will pay a $3 dividend in one year. If investors expect that dividend to remain constant forever, and they require a 10% return on Dynasty stock, what is the stock worth? What is the stock worth if investors expect Dynasty’s dividends to grow at 3% per year?
Oxygen Optimization stock is currently priced at 59.81 dollars per share. The stock is expected to pay annual dividends that are expected to grow by 2.27 percent per year forever starting after the next dividend is paid in 1 year. The expected return on the stock is 14.07 percent per year. What is the dividend expected to be in 8 years?