Homework Answers
Required return = Dividend / Price + growth
= 6.80/132 + 4%
= 5.15% + 4%
= 9.15 %
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A firm pays a $6.80 dividend at the end of year one (D), has a stock...
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A firm pays a $1.50 dividend at the end of year one. It has a share price of $60 (P) and a constant growth rate (g) of 9 percent. a. Compute the required (expected) rate of return (KJ. (Do not round Intermediate calculations, Round the final answer to 2 decimal places.) Required rate of return Also indicate whether each of the following changes would make the required rate of retum (K) go up or down, in each question below, assume...
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Business has been good for Keystone Control Systems, as indicated by the six-year growth in earnings...
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BioScience Inc. will pay a common stock dividend of $3.55 at the end of the year (D1). The required return on common stock (K.) is 20 percent. The firm has a constant growth rate (g) of 10 percent. Compute the current price of the stock (Po). (Do not round intermediate calculations. Round your answer to 2 decimal places.) Current price Current price 0
Business has been good for Keystone Control Systems, as indicated by the eleven-year growth in earnings per share. The earnings have grown from $100 to $170. a. Determine the compound annual rate of growth in earnings (n=11). (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Compound annual rate of growth b. Based on the growth rate determined in part a project earnings for next year (E1) (Do not round intermediate calculations. Round...
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Ecology Labs Inc. will pay a dividend of $5.30 per share in the next 12 months (D1). The required rate of return (Ke) is 19 percent and the constant growth rate is 8 percent. (Each question is independent of the others.) a. Compute the price of Ecology Labs' common stock. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Price b. Assume Ke, the required rate of return, goes up to 23 percent. What will be the...
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