Problem 7-12 Stock Valuation [LO 1] Alexander Corp. will pay a dividend of $3.20 next year....

Question

Question

Answer 1

Answer #1

Calculation of Current Price @17% Current Stock price(PO) Requirement-1 01/(Ke-g) 3.20/(0.17-0.05) $ 26.67 Stock price Today

Answer 2

Similar Homework Help Questions

Cape Corp. will pay a dividend of $2.64 next year. The company has stated that it...

Cape Corp. will pay a dividend of $2.64 next year. The company has stated that it will maintain a constant growth rate of 4.5 percent a year forever. a. If you want a return of 12 percent, how much will you pay for the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. If you want a return of 8 percent, how much will you pay for the stock? (Do not round...
Wesen Corp. will pay a dividend of $4.10 next year. The company has stated that it...

Wesen Corp. will pay a dividend of $4.10 next year. The company has stated that it will maintain a constant growth rate of 5.25 percent a year forever If you want a return of 18 percent, how much will you pay for the stock? (Do not round intermediate calculations and round your answer to 2 declmal places, e.g., 32 Current stock price If you want a return of 10 percent, how much will you pay for the stock? Do not...
Problem 8-7 Stock Valuation [LO1] Estes Park Corp. pays a constant $9.35 dividend on its stock....

Problem 8-7 Stock Valuation [LO1] Estes Park Corp. pays a constant $9.35 dividend on its stock. The company will maintain this dividend for the next 10 years and will then cease paying dividends forever. If the required return on this stock is 10 percent, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Alexander corp. will pay a dividend of $2.90 next year. The company has stated that it...

Alexander corp. will pay a dividend of $2.90 next year. The company has stated that it will maintain a constant growth rate of 5.25 percent a year forever. If you want a return of 18 percent, how much will you pay for the stock?
Q12. Stock Valuation: Cape Corp. will pay a dividend of $2.64 next year. The company has...

Q12. Stock Valuation: Cape Corp. will pay a dividend of $2.64 next year. The company has stated that it will maintain a constant growth rate of 4.5 percent a year forever. If you want a return of 12 percent, how much will you pay for the stock? What if you want a return of 8 percent? What does this tell you about the relationship between the required return and the stock price? Dividend paid Dividend growth rate Required return Required...
Gruber Corp. pays a constant $6.95 dividend on its stock. The company will maintain this dividend for the next 12 ye...

Gruber Corp. pays a constant $6.95 dividend on its stock. The company will maintain this dividend for the next 12 years and will then cease paying dividends forever. The required return on this stock is 10 percent. 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 $

Problem 8-7 Stock Valuation [LO1]

Burnett Corp. pays a constant $7.25 dividend on its stock. The company will maintain this dividend for the next 9 years and will then cease paying dividends forever. If the required return on this stock is 12 percent, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Gruber Corp. pays a constant $8.45 dividend on its stock. The company will maintain this dividend...

Gruber Corp. pays a constant $8.45 dividend on its stock. The company will maintain this dividend for the next 15 years and will then cease paying dividends forever. The required return on this stock is 13 percent. 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
Burkhardt Corp. pays a constant $13.40 dividend on its stock. The company will maintain this dividend...

Burkhardt Corp. pays a constant $13.40 dividend on its stock. The company will maintain this dividend for the next 6 years and will then cease paying dividends forever. If the required return on this stock is 9 percent, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g.. 32.16.) Share price

Burkhardt Corp. pays a constant $13.80 dividend on its stock. The company will maintain this dividend...

Burkhardt Corp. pays a constant $13.80 dividend on its stock. The company will maintain this dividend for the next seven years and will then cease paying dividends forever. If the required return on this stock is 9 percent, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Share price $