Cisco System’s growth has slowed to a constant rate during the past few years. As a...
Cisco System’s growth has slowed to a constant rate during the past few years. As a result, the company expects its common stock dividend to grow at a constant 5 percent for the remainder of the company’s life. Today, Cisco paid common stockholders a $3 dividend. If the required rate of return on the company’s stock is 8%, what is the fairvalue of the stock today? Show your work.
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Cisco System’s growth has slowed to a constant rate
during the past few years. As a...
1. The last dividend paid by Corporation was $1.00. Corporation’s growth rate is expected to be...
1. The last dividend paid by Corporation was $1.00. Corporation’s growth rate is expected to be 5 percent forever. Corporation’s required rate of return on equity is 12 percent. What is the current price of Corporation’s common stock? 2. Corporation has paid a $1.00 dividend every year on its preferred stock since its inception in 1967. Investors demand a 7 percent required return on the stock. What should Corporation’s stock trade for in the market? 3. The last dividend paid by Corporation...
Merriweather Manufacturing Company has been growing at a rate of 3.9 percent for the past two...
Merriweather Manufacturing Company has been growing at a rate of 3.9 percent for the past two years, and the CEO expects the company to continue to grow at this rate for the next several years. The company paid a dividend of 1.53 last year. If your required rate of return is 16.0 percent, what is the maximum price that you would be willing to pay for this company’s stock? Round to 2 decimal places.
Clarion Corp. has been selling electrical supplies for the past 20 years. The company's product line...
Clarion Corp. has been selling electrical supplies for the past 20 years. The company's product line has changed very little in the past five years, and the company's management does not expect to add any new items for the foreseeable future. Last year, the company paid a dividend of 4.45 to its common stockholders. The company is not expected to increase its dividends for the next several years. If your required rate of return for such firms is 10.4 percent,...
Riggs Inc. has seen non-constant dividend growth in recent years. Dividends are expected to grow at...
Riggs Inc. has seen non-constant dividend growth in recent years. Dividends are expected to grow at rates of 20%, 15% and 10% for the next three years respectively. After that, dividend is expected to remain constant at a rate of 5%. Riggins Riggs has a required rate of return of 10%. a. If the last paid dividend, D0, was $2.50, what would Riggins Riggs stock be worth today? b. What would the capital gains and dividend yield equal in the...
1. Ivanhoe, Inc., management expects to pay no dividends for the next six years. It has...
1. Ivanhoe, Inc., management expects to pay no dividends for the next six years. It has projected a growth rate of 25 percent for the next seven years. After seven years, the firm will grow at a constant rate of 5 percent. Its first dividend, to be paid in year 7, will be $3.61. If the required rate of return is 17 percent, what is the stock worth today? (Round intermediate calculations and final answer to 2 decimal places, e.g....
Constant growth: Your required rate of return is 21.5 percent. Ninex Ltd has just paid a...
Constant growth: Your required rate of return is 21.5 percent. Ninex Ltd has just paid a dividend of $3.12 and expects to grow at a constant rate of 5.0 percent. What is the expected price of the share three years from now? (Round all dividends to the nearest cent, round your final answer to the nearest cent, i.e., $14.75) P3 = $________
TDAC has just paid $3 per share. The required rate of return for the stock is 9%. It had difficult few years and so the...
TDAC has just paid $3 per share. The required rate of return for the stock is 9%. It had difficult few years and so the Board of Directors decided to cut the dividend by 3% every year, starting next dividend to be paid. What is the price of the stock at the scenario? There are some optimist investors too. They think the decrease will be for the next 2 years only and after that the dividend will again grow at...
Management of Sandhill, a biotech firm, forecasted the following growth rates for the next three years: 35 percent, 28 percent, and 22 percent. Management then expects the company to grow at a constant rate of 9 percent forever. The company paid a dividen
Management of Sandhill, a biotech firm, forecasted the following growth rates for the next three years: 35 percent, 28 percent, and 22 percent. Management then expects the company to grow at a constant rate of 9 percent forever. The company paid a dividend of $2.00 last week. If the required rate of return is 20 percent, what is the value of this stock?
1.Golf World has a constant dividend growth rate of 10% and has just paid a dividend (D0) of $5.00. If the required rate...
1.Golf World has a constant dividend growth rate of 10% and has just paid a dividend (D0) of $5.00. If the required rate of return is 15%, what will the stock sell for one year from now? A) $90.00 B) $95.50 C) $ 100.00 D) $121.00 2.The dividend yield on AAA’s common stock is 5%. The company just paid a $4 dividend (D0), which will be $4.40 next year. The dividend growth rate (g) is expected to remain constant at...
1. A company is a fast growing technology company. The firm projects a rapid growth of...
1. A company is a fast growing technology company. The firm projects a rapid growth of 40 percent for the next two years and then a growth rate of 20 percent for the following two years. After that, the firm expects a constant-growth rate of 12 percent. The firm expects to pay its first dividend of $1.25 a year from now. If your required rate of return on such stocks is 20 percent, what is the current price of the...
Clarion Corp. has been selling electrical supplies for the past 20 years. The company's product line has changed very little in the past five years, and the company's management does not expect to add any new items for the foreseeable future. Last year, the company paid a dividend of 4.45 to its common stockholders. The company is not expected to increase its dividends for the next several years. If your required rate of return for such firms is 10.4 percent,...
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