Question

A stock paying $5 in annual dividends is now priced at $80. It has an expected...

A stock paying $5 in annual dividends is now priced at $80. It has an expected return of 16%. What might investors expect to sell for this stock one year from now?

Please show your work and formula

0 0
Add a comment Improve this question Transcribed image text
Know the answer?
Add Answer to:
A stock paying $5 in annual dividends is now priced at $80. It has an expected...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

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
  • -11a 5. A stock paying $5 in annual dividends sells now for $95 and has an...

    -11a 5. A stock paying $5 in annual dividends sells now for $95 and has an expected return of 11%. What would be the stock price one year from now? wo 2 2218 6. What is the beta for a stock with an expected return of 12%, if the risk-free rate of return is 4%, and the market-risk premium is 10%? A) 0.6 B) 0.8 C) 1.0 D) 1.2 ALEPTA 1G

  • You expect Stock Q to start paying annual dividends exactly one year from now. You think...

    You expect Stock Q to start paying annual dividends exactly one year from now. You think that the first dividend will be $0.53 and that the dividend will grow 4.4% per year forever after that. Your required rate of return for Stock Q is 8.4%. What is the value of Stock Q today? Round your answer to the nearest penny.

  • The expected pretax return on three stocks is divided between dividends and capital gains in the...

    The expected pretax return on three stocks is divided between dividends and capital gains in the following way! Expected Expected Stock Dividend Capital Gain $10 50 Required: o. If each stock is priced at $195, what are the expected net percentage returns on each stock too) a pension fund that does not pay taxes, a corporation paying tax at 21% (the effective tax rate on dividends received by corporations is 6.3%), and (ii) an individual with an effective tax rate...

  • Suppose that a stock is priced at $80. Given that a potential buyer has a required...

    Suppose that a stock is priced at $80. Given that a potential buyer has a required rate of return on equity investments of 9%, the expected dividend for next year when the constant rate of growth of dividends is 5% is $ (Round your response to the nearest two decimal places.)

  • #11 and #13 (CAPM) The stock is appropriately priced and its expected annual return is 10.4%....

    #11 and #13 (CAPM) The stock is appropriately priced and its expected annual return is 10.4%. The annual return on the 30-year Treasury is 3.5%, and the expected annual return on S&P 500 is 13%. What is the stock's beta coefficient? 12. (CAPM) The stock is appropriately priced and its expected annual return is 14.1%. The annual return on the 30-year Treasury is 2.5%, and the expected annual return on S&P 500 is 12%. What is the stock's beta coefficient?...

  • ebook Problem Walk Through Nonconstant Growth Stock Valuation Simpkins Corporation does not pay any dividends because...

    ebook Problem Walk Through Nonconstant Growth Stock Valuation Simpkins Corporation does not pay any dividends because it is expanding rapidly and needs to retain all of its earnings. However, investors expect Simpkins to begin paying dividends, with the first dividend of $1.00 coming 3 years from today. The dividend should grow rapidly - at a rate of 80% per year during Years 4 and 5. After Year 5, the company should grow at a constant rate of 5% per year....

  • Stock Expected Dividend Expected Capital Gain A $0 $10 B $5 $5 C $10 $0 A....

    Stock Expected Dividend Expected Capital Gain A $0 $10 B $5 $5 C $10 $0 A. If each stock is priced at $110, what are the expected net percentage returns on each stock to (i) a pension fund that does not pay taxes, (ii) a corporation paying tax at 35% (the effective tax rate on dividends received by corporations is 10.5%), and (iii) an individual with an effective tax rate of 15% on dividends and 10% on capital gains? (Do...

  • Chen Inc. announced today that it will begin paying annual dividends. The first dividend will be...

    Chen Inc. announced today that it will begin paying annual dividends. The first dividend will be paid next year in the amount of $.75 a share. The following dividends will be $1.00, $1.10, and $1.20 a share annually for the following three years, respectively. After that, dividends are projected to increase by 3% per year. How much are you willing to pay to buy one share of this stock if your desired rate of return is 6%? Please show all...

  • Diets For You announced today that it will begin paying annual dividends next year. The first...

    Diets For You announced today that it will begin paying annual dividends next year. The first dividend will be $1.25 a share. The following dividends will be $0.25, $0.25, $0.50, and $0.75 a share annually for the following 4 years, respectively. At the end of the fifth year, the stock could be sold for $18. How much are you willing to pay to buy one share of this stock today if your desired rate of return is 8.5 percent? Please...

  • A stock just paid annual dividends of $3.55 per share. The dividends are expected to grow...

    A stock just paid annual dividends of $3.55 per share. The dividends are expected to grow at 20 per cent per year for 4 years, and then remain constant in perpetuity. If the investors' required return for the stock is 11.8 percent, what should be the price of the stock today?

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