Leisure Lodge Corporation is expected to pay the following dividends over the next four years: $18.00,...

Question

Question

Leisure Lodge Corporation is expected to pay the following dividends over the next four years: $18.00, $10.00, $7.00 and $2.3

Answer 1

Answer #1

Current Share Price = $26.514

Working Notes :-

(i) Dividend at t=5 is - 2.30 x 1.05 = $2.415

(ii) P4 = D5 / Re - g

P4 = $2.415 / 0.11 - 0.05

P4 = $40.25

(iii) discount this amount 4 years back using 11%

Po = $40.25 / (1.11)4

P0 = $26.514

Answer 2

Similar Homework Help Questions

Leisure Lodge Corporation is expected to pay the following dividends over the next four years: $22.00, $10.00, $8.20 a...

Leisure Lodge Corporation is expected to pay the following dividends over the next four years: $22.00, $10.00, $8.20 and $2.80. Afterwards, the company pledges to maintain a constant 5 percent growth rate in dividends forever. If the required return on the stock is 16 percent, what is the current share price? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Share price
Leisure Lodge Corporation is expected to pay the following dividends over the next four years: $20.00,...

Leisure Lodge Corporation is expected to pay the following dividends over the next four years: $20.00, $15.00, $7.80 and $3.10. Afterwards, the company pledges to maintain a constant 6 percent growth rate in dividends forever. If the required return on the stock is 17 percent, what is the current share price? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Leisure Lodge Corporation is expected to pay the following dividends over the next four years: $19.00,...

Leisure Lodge Corporation is expected to pay the following dividends over the next four years: $19.00, $15.00, $7.60 and $2.90. Afterwards, the company pledges to maintain a constant 3 percent growth rate in dividends forever. If the required return on the stock is 13 percent, what is the current share price?

Leisure Lodge Corporation is expected to pay the following dividends over the next four years: $23.00, $15.00, $8.40 an...

Leisure Lodge Corporation is expected to pay the following dividends over the next four years: $23.00, $15.00, $8.40 and $3.00. Afterwards, the company pledges to maintain a constant 3 percent growth rate in dividends forever. If the required return on the stock is 20 percent, what is the current share price?
Problem 6-19 Multiple Growth Rates (L01, CFA6) Leisure Lodge Corporation is expected to pay the following...

Problem 6-19 Multiple Growth Rates (L01, CFA6) Leisure Lodge Corporation is expected to pay the following dividends over the next four years: $18.00, $10.00, $8.00 and $2.60. Afterwards, the company pledges to maintain a constant 6 percent growth rate in dividends forever. If the required return on the stock is 12 percent, what is the current share price? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Share price
Apocalyptica Corporation is expected to pay the following dividends over the next four years: $3, $15,...

Apocalyptica Corporation is expected to pay the following dividends over the next four years: $3, $15, $10, and $3.08. Afterwards, the company pledges to maintain a constant 5 percent growth rate in dividends, forever. Required: If the required return on the stock is 10 percent, what is the current share price

Far Side Corporation is expected to pay the following dividends over the next four years: $14....

Far Side Corporation is expected to pay the following dividends over the next four years: $14. $12. $7 and $4. Afterward, the company pledges to maintain a constant 5 percent growth rate in dividends forever. Required: If the required return on the stock is 12 percent, what is the current share price? (Do not round your intermediate calculations.)
Apocalyptica Corporation is expected to pay the following dividends over the next four years: $8.00, $6.00,...

Apocalyptica Corporation is expected to pay the following dividends over the next four years: $8.00, $6.00, $4.75, and $2.25. Afterwards, the company pledges to maintain a constant 4.5 percent growth rate in dividends, forever. If the required return on the stock is 10 percent, what is the current share price? Please done in excel sheet and show the whole workings.
Far Side Corporation is expected to pay the following dividends over the next four years: $16,...

Far Side Corporation is expected to pay the following dividends over the next four years: $16, $12, $7, and $4. Afterward, the company pledges to maintain a constant 5 percent growth rate in dividends forever. Required: If the required return on the stock is 10 percent, what is the current share price? (Do not round your intermediate calculations.) $87.60 $94.61 $85.34 $92.52 $89.83

Far Side Corporation is expected to pay the following dividends over the next four years: $11,...

Far Side Corporation is expected to pay the following dividends over the next four years: $11, $9, $5, and $2. Afterward, the company pledges to maintain a constant 8 percent growth rate in dividends forever. Required: If the required return on the stock is 16 percent, what is the current share price? (Do not round your intermediate calculations.) Options $33.62 $35.39 $36.45 $34.79 $43.33