ZuoTi.Pro
Question

Bayou Okra Farms just paid a dividend of $2.65 on its stock. The growth rate in...

Bayou Okra Farms just paid a dividend of $2.65 on its stock. The growth rate in dividends is expected to be a constant 4.5% per year indefinitely. Investors require a return of 15% for the first three years, a return of 13% for the next three years, and a return of 11% thereafter. What is the current share price?

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Current share price is given as=2.65*1.045/1.15+2.65*1.045^2/1.15^2+2.65*1.045^3/1.15^3+2.65*1.045^3/1.15^3*1.045/1.13+2.65*1.045^3/1.15^3*(1.045/1.13)^2+2.65*1.045^3/1.15^3*(1.045/1.13)^3+2.65*1.045^3/1.15^3*(1.045/1.13)^3*1.045/(11%-4.5%)=36.97888343

0 0
Add a comment
Know the answer?
Add Answer to:
Bayou Okra Farms just paid a dividend of $2.65 on its stock. The growth rate in...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Bayou Okra Farms just paid a dividend of $3.95 on its stock. The growth rate in...

    Bayou Okra Farms just paid a dividend of $3.95 on its stock. The growth rate in dividends is expected to be a constant 5 percent per year indefinitely. Investors require a return of 14 percent for the first three years, a return of 12 percent for the next three years, and a return of 10 percent thereafter. What is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

  • Problem 8-14 Stock Valuation [LO1] Bayou Okra Farms just paid a dividend of $3.90 on its...

    Problem 8-14 Stock Valuation [LO1] Bayou Okra Farms just paid a dividend of $3.90 on its stock. The growth rate in dividends is expected to be a constant 5 percent per year indefinitely. Investors require a return of 13 percent for the first three years, a return of 11 percent for the next three years, and a return of 9 percent thereafter. What is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal...

  • Bayou Okra Farms just paid a dividend of $3.05 on its stock. The growth rate in dividends is expected to be a constant 5 percent per year indefinitely.

    Bayou Okra Farms just paid a dividend of $3.05 on its stock. The growth rate in dividends is expected to be a constant 5 percent per year indefinitely. Investors require a return of 12 percent for the first three years, return of 10 percent for the next three years, and a return of 8 percent thereafter. What is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, ... 32.16.) Current share price =...

  • Rasheed Farm just paid a dividend of $2.65 on its stock. The growth rate in dividends...

    Rasheed Farm just paid a dividend of $2.65 on its stock. The growth rate in dividends is expected to be a constant 4.5 percent per year indefinitely. Investors require a return of 15 percent for the first three years, a return of 13 percent for the next three years and a return of 11 percent thereafter. What is the current share price?

  • Stock Valuation Bretton, Inc., just paid a dividend of $3.15 on its stock. The growth rate in dividends is expected to...

    Stock Valuation Bretton, Inc., just paid a dividend of $3.15 on its stock. The growth rate in dividends is expected to be a constant 4 percent per year, indefinitely. Investors require a 15 percent return on the stock for the first three years, a 13 percent return for the next three years, and then an 11 percent return thereafter. What is the current share price for the stock?

  • TUV Inc., just paid a dividend of $4.5 per share on its stock. The growth rate...

    TUV Inc., just paid a dividend of $4.5 per share on its stock. The growth rate in dividends is expected to be a constant 6 percent per year indefinitely. Investors require an 20 percent return on the stock for the first three years, then a 12 percent return for the next three years, and then an 9 percent return thereafter. What is the current share price? Answer to two decimals, carry intermediate calcs. to four decimals.

  • solve by hand please Intermedlate (Questions 12-29) 12. Stock Valuation (L01) Taleville Farms just paid a...

    solve by hand please Intermedlate (Questions 12-29) 12. Stock Valuation (L01) Taleville Farms just paid a dividend of $3.20 on its stock. The growth rate in dividends is expected to be a constant 5% per year indefinitely. Investors require a 15% return on the stock for the first three years, a 13% return for the next three years, and an 11% return thereafter. What is the current share price? 13 Non.Constant Growth ( 1) Faytra Bearings Ine tartun coma No...

  • Sea Side, Inc., just paid a dividend of $1.96 per share on its stock. The growth...

    Sea Side, Inc., just paid a dividend of $1.96 per share on its stock. The growth rate in dividends is expected to be a constant 3.1 percent per year indefinitely. Investors require a return of 25 percent on the stock for the first three years, then a 20 percent return for the next three years, and then a 18 percent return thereafter. What is the current share price? (Do not round intermediate calculations. Round your answer to 2 decimal places....

  • Dixon Company just paid a dividend of $3.00 on its stock. The growth rate in dividends...

    Dixon Company just paid a dividend of $3.00 on its stock. The growth rate in dividends is expected to be 30% from year 1 to year 5. The growth rate will then drop to -5% in years 6 and 7. It will then stabilize at 4% thereafter. Investors require a 15 % return on the stock for the first 5 years, 12% return for the next three years, and then 9% return thereafter. What is the current share price of...

  • James Co. just paid a dividend of $3.00 on its stock. The growth rate in dividends...

    James Co. just paid a dividend of $3.00 on its stock. The growth rate in dividends is expected to be 30% in the up period, which lasts from year 1 to year 5. The growth rate will then drop to -5% in the down period that lasts from year 6 to year 7. It will then stabilize at 4% thereafter. Investors in James Co. require a 15 percent return on the stock for the first five years, a 12 percent...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT