The Brennan Co. just paid a dividend of $2.50 per share on its stock. The dividends...
The Brennan Co. just paid a dividend of $2.50 per share on its stock. The dividends are expected to grow at a constant rate of 7% per year indefinitely. Brennan Co. investors require a 12% return on their stock.
a. What is the current price of a share of Brennan Co. Stock?
b. What will be the price of a share in of Brennan Co. Stock in 5 years?
c. What will be the price of a share of Brennan Co. Stock in 20 years?
Homework Answers
a. Current Stock Price = Expected Dividend / ( required Rate of Return - growth rate)
= ( $ 2.50 * 107%) / ( 12% -7%)
= $ 53.50
Hence the correct answer is $ 53.50
b. Price in 5 Years = Current Price * (1+ Growth Rate ) ^ 5
= $ 53.50 * ( 1+7/100) ^ 5
= $ 75.04
Hence the correct answer is $ 75.04
c.
Price in 20 Years = Current Price * (1+ Growth Rate ) ^20
= $ 53.50 * ( 1+7/100) ^ 20
= $ 207.03
Hence the correct answer is $ 207.03
Add Answer to:
The Brennan Co. just paid a dividend of $2.50 per share on its
stock. The dividends...
The Napa Co. just paid a dividend of $3.15 per share on its stock. The dividends...
The Napa Co. just paid a dividend of $3.15 per share on its stock. The dividends are expected to grow at a constant rate of 5 percent per year indefinitely. If investors require a return of 12 percent on the stock, what is the current price? What will the price be in four years?
The Herjavec Co just paid a dividend of 2.00 per share on its stock. The dividends...
The
Herjavec Co just paid a dividend of 2.00 per share on its stock.
The dividends are expected to grow at a constant rate of 4 percent
per year indefinitely. Investors require a return of 12 percent on
the company's stock.
The Herjavec Co.just paid a dividend of $2.00 per share on its stock. The dividends are expected to grow at a constant rate of 4 percent per year indefinitely. Investors require a return of 12 percent on the company's...
The Stopperside Wardrobe Co. just paid a dividend of $1.45 per share on its stock. The...
The Stopperside Wardrobe Co. just paid a dividend of $1.45 per share on its stock. The dividends are expected to grow at a constant rate of 6 percent per year indefinitely. If investors require an 11 percent return on The Stopperside Wardrobe Co. stock, what is the current price? What will the price be in three years? In 15 years?
The Starr Co. just paid a dividend of $1.32 per share on its stock. The dividends...
The Starr Co. just paid a dividend of $1.32 per share on its stock. The dividends are expected to grow at a constant rate of 6 percent per year indefinitely. Required: (a) If investors require a 14 percent return on stock, what is the current price? (Do not include the dollar sign ($). Round your answer to 2 decimal places. (e.g., 32.16)) Current price $ (b) If investors require a 14 percent return on stock, what will the price be...
he Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.48 per share on its stock. The...
he Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.48 per share on its stock. The dividends are expected to grow at a constant rate of 6 percent per year indefinitely. a. If investors require a return of 12 percent on the company's stock, what is the current price? b. What will the price be in 14 years?
ABC Co.. just paid a dividend of $1.69 per share on its stock. The dividends are...
ABC Co.. just paid a dividend of $1.69 per share on its stock. The dividends are expected to grow at a constant rate of 7.2% per year indefinitely. If investors require an 12.2% return on ABC Co.. stock, answer the following: (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.) What will the price be in 15 years?
ABC Co.. just paid a dividend of $1.65 per share on its stock. The dividends are...
ABC Co.. just paid a dividend of $1.65 per share on its stock. The dividends are expected to grow at a constant rate of 7.0% per year indefinitely. If investors require an 12.0% return on ABC Co., stock, answer the following: (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.) What will the price be in three years?
ABC Co.. just paid a dividend of $1.65 per share on its stock. The dividends are...
ABC Co.. just paid a dividend of $1.65 per share on its stock. The dividends are expected to grow at a constant rate of 7.0% per year indefinitely. If investors require an 12.0% return on ABC Co.. stock, answer the following: (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.) What will the price be in three years?
ABC Co.. just paid a dividend of $1.47 per share on its stock. The dividends are...
ABC Co.. just paid a dividend of $1.47 per share on its stock. The dividends are expected to grow at a constant rate of 6.1% per year indefinitely. If investors require an 11.1% return on ABC Co.. stock, answer the following: (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.) What will the price be in 15 years?
The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.28 per share on its stock. The...
The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.28 per share on its stock. The dividends are expected to grow at a constant rate of 7 percent per year indefinitely. Required: (a) If investors require a 12 percent return on The Jackson-Timberlake Wardrobe Co. stock, what is the current price? (Click to select)$6.74$25.60$26.84$27.94$27.39 (b) What will the price be in 8 years? (Click to select)$47.06$43.99$48.01$46.12$11.58
The
Herjavec Co just paid a dividend of 2.00 per share on its stock.
The dividends are expected to grow at a constant rate of 4 percent
per year indefinitely. Investors require a return of 12 percent on
the company's stock.
The Herjavec Co.just paid a dividend of $2.00 per share on its stock. The dividends are expected to grow at a constant rate of 4 percent per year indefinitely. Investors require a return of 12 percent on the company's...
ABC Co.. just paid a dividend of $1.69 per share on its stock. The dividends are expected to grow at a constant rate of 7.2% per year indefinitely. If investors require an 12.2% return on ABC Co.. stock, answer the following: (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.) What will the price be in 15 years?
ABC Co.. just paid a dividend of $1.65 per share on its stock. The dividends are expected to grow at a constant rate of 7.0% per year indefinitely. If investors require an 12.0% return on ABC Co., stock, answer the following: (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.) What will the price be in three years?
Most questions answered within 3 hours.
-
Industry: Telecommunications in India
Here, you need to discuss the sources of the growth pattern
and...
asked 1 hour ago -
Hydrobromic acid
dissolves solid iron according to the followiaung reaction:
Fe(s)+2HBr(aq)→
FeBr2(aq)+ H2(g)
Part A. What...
asked 2 hours ago -
Verify the following vector identity in SPHERICAL
COORDINATES.
div(curl(A)) = 0
asked 4 hours ago -
The work function (Φ) for a metal is 7.50×10-19 J.
What is the longest wavelength (nm)...
asked 5 hours ago -
1. Would the following procedural changes cause the
calculated mass percent Ni2+ ion in Ni(NH3)nCl2 to...
asked 6 hours ago -
1. Why does the voltage of the capacitor vary with frequency?
where does this missing voltage...
asked 8 hours ago -
p p please write each step out clearly
3. A manager of a company is considering...
asked 7 hours ago -
On October 1, Ebony Ernst organized Ernst Consulting; on October
3, the owner contributed $83,540 in...
asked 8 hours ago -
A.)As an electron moves through a region of space, its speed
decreases from 9.60 × 106...
asked 8 hours ago -
In java with the netbeans program do:
Through object programming
Create a class "ContadorP", which is...
asked 8 hours ago -
Pattern Corporation acquired all of Science
Company's outstanding stock on January 1, 2016 for $600,000 cash....
asked 8 hours ago -
Here are all accounts Tyler Co. maintains.
Tax expenses $4,750
Common stocks $48,840
SG&A expenses $2,500...
asked 8 hours ago