How to do this 5.) Stock Valuation [LO1] Keenan Co. is expected to maintain a constant...

Question

Question

How to do this
5.) Stock Valuation [LO1] Keenan Co. is expected to maintain a constant 4.8 perca growth rate in its dividends indefinitely.

Answer 1

Answer #1

Answer: Dividend Yield = D1 / P0

Required return (R) = (D1 / P0) + g

Where D1 = Annual Dividend, P0 = Current Share price, g = growth

Given: D1 / P0 = .069, g = .048

R = .069 + .048

Required return on the company's stock = .117 or 11.7%

Answer 2

Similar Homework Help Questions

Stock Valuation Change, Inc., is expected to maintain a constant 4.9 percent growth rate in its...

Stock Valuation Change, Inc., is expected to maintain a constant 4.9 percent growth rate in its dividends, indefinitely. If the company has a dividend yield of 5.2 percent, what is the required return on the company's stock?
Grateful Eight Co. is expected to maintain a constant 5.6 percent growth rate in its dividends...

Grateful Eight Co. is expected to maintain a constant 5.6 percent growth rate in its dividends indefinitely. If the company has a dividend yield of 7.4 percent, what is the required return on the company's stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Required return
Grateful Eight Co. is expected to maintain a constant 6.4 percent growth rate in its dividends...

Grateful Eight Co. is expected to maintain a constant 6.4 percent growth rate in its dividends indefinitely. If the company has a dividend yield of 8.2 percent, what is the required return on the company’s stock?

Glenhill Co. is expected to maintain a constant 6.0% growth rate in its dividends indefinitely. If...

Glenhill Co. is expected to maintain a constant 6.0% growth rate in its dividends indefinitely. If the company has a dividend yield of 7.8%, what is the required return on the company's stock? (Round the final answer to 2 decimal places.) Required return %
Tell Me Why Co. is expected to maintain a constant 4.21 percent growth rate in its...

Tell Me Why Co. is expected to maintain a constant 4.21 percent growth rate in its dividends indefinitely. If the company has a dividend yield of 8.63 percent, what is the required return on the company’s stock?
Change, Inc., is expected to maintain a constant 4.2 percent growth rate in its dividends, indefinitely....

Change, Inc., is expected to maintain a constant 4.2 percent growth rate in its dividends, indefinitely. The company has a dividend yield of 6 percent. What is the required return on the company's stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Required return

I Problem 8-6 Stock Valuation [LO1] Suppose you know that a company's stock currently sells for...

I Problem 8-6 Stock Valuation [LO1] Suppose you know that a company's stock currently sells for $60 per share and the required return on the stock is 10 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share? (Do not round intermediate calculations and round...
S08-06 Stock Valuation (LO1) Suppose you know that a company's stock currently sells for $74 per...

S08-06 Stock Valuation (LO1) Suppose you know that a company's stock currently sells for $74 per share and the required return on the stock is 10.6 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share? (Do not round intermediate calculations and round your answer...
Redan, Inc., is expected to maintain a constant 4.3 percent growth rate in its dividends, indefinitely....

Redan, Inc., is expected to maintain a constant 4.3 percent growth rate in its dividends, indefinitely. If the company has a dividend yield of 5.6 percent, what is the required return on the company’s stock?

A stock is expected to maintain a constant dividend growth rate of 4.9 percent indefinitely

1A stock is expected to maintain a constant dividend growth rate of 4.9 percent indefinitely. If the stock has a dividend yield of 6.2 percent, what is the required return on the stock? 9.2% 10.4% 9.9% 10.4% 11.1%2A stock just paid a dividend of $5.13 and is expected to maintain a constant dividend growth rate of 4.1 percent indefinitely. If the current stock price is $71, what is the dividend yield the stock has? 10.85% 11.62% 9.91% 10.76% o 7.52%