K’s Fashions is growing quickly. Dividends are expected to increase by 8 percent annually for the next three years, with the growth rate falling off to a constant 3 percent thereafter. The required return is 14 percent and the company just paid a $3.64 annual dividend. What is the current share price?
D1=(3.64*1.08)=$3.9312
D2=(3.9312*1.08)=$4.245696
D3=(4.245696*1.08)=$4.58535168
Value after year 3=(D3*Growth Rate)/(Required Rate-Growth rate)
=(4.58535168*1.03)/(0.14-0.03)
=$42.93556573
Hence current share price=Future dividends*Present value of discounting factor(rate%,time period)
=$3.9312/1.14+$4.245696/1.14^2+$4.58535168/1.14^3+$42.93556573/1.14^3
which is equal to
=$38.79(Approx).
K’s Fashions is growing quickly. Dividends are expected to increase by 8 percent annually for the...
Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 3.64 percent for the next three years, with the growth rate falling off to a constant 5.28 percent thereafter. If the required return is 11.44 percent and the company just paid a dividend of $2.62, what is the current share price?
Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 18 percent for the next 3 years, with the growth rate falling off to a constant 4 percent thereafter. If the required return is 9 percent and the company just paid a $2.50 dividend. what is the current share price?
Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 1.35 percent for the next three years, with the growth rate falling off to a constant 6.63 percent thereafter. If the required return is 10.96 percent and the company just paid a dividend of $7.22, what is the current share price
Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 30 percent for the next three years, with the growth rate falling off to a constant 4 percent thereafter. If the required return is 11 percent, and the company just paid a dividend of $2.45, what is the current share price?
Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 23 percent for the next 3 years, with the growth rate falling off to a constant 5 percent thereafter. If the required return is 10 percent and the company just paid a $2.80 dividend. what is the current share price?
Marcel Co. is growing quickly. Dividends are expected to grow at a 19 percent rate for the next 3 years, with the growth rate falling off to a constant 5 percent thereafter. Required: If the required return is 9 percent and the company just paid a $2.40 dividend. what is the current share price?
Phillips Co. is growing quickly. Dividends are expected to grow at a rate of 20 percent for the next three years, with the growth rate falling off to a constant 5 percent thereafter. If the required return is 14 percent and the company just paid a dividend of $2.50, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current share price $
Biarritz Corp. is growing quickly. Dividends are expected to grow at a rate of 31 percent for the next three years, with the growth rate falling off to a constant 6.1 percent thereafter. The required return is 12 percent and the company just paid a dividend of $2.80. What are the dividends each year for the next four years? What is the share price in three years? What is the current share price?
Burton Corp. is growing quickly. Dividends are expected to grow at a rate of 32 percent for the next three years, with the growth rate falling off to a constant 7.2 percent thereafter If the required return is 14 percent and the company just paid a dividend of $3.35, what is the current share price? (Hint Calculate the first four dividends.) (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current share price
Biarritz Corp. is growing quickly. Dividends are expected to grow at a rate of 31 percent for the next three years, with the growth rate falling off to a constant 6.1 percent thereafter. If the required return is 12 percent and the company just paid a dividend of 2.80, what is the current share price? Round answer to 2 decimal places