A stock just paid a dividend of D0 = $1.50. The required rate of return is rs = 15.5%, and the constant growth rate is g = 4.0%. What is the current stock price?
Select the correct answer.
|
|||
|
|||
|
|||
|
|||
|
The current stock price
Here, we have Dividend per share in year 0 (D0) = $1.50 per share
Dividend Growth Rate (g) = 4.00% per year
Required Rate of Return (Ke) = 15.50%
As per Constant Growth Dividend Valuation Model, the Price of the stock is calculated as follows
The Price of the stock today = D0(1 + g) / (Ke – g)
= $1.50(1 + 0.04) / (0.1550 – 0.04)
= $1.56 / 0.1150
= $13.57 per share
“Hence, the current stock price will be (b). $13.57”
A stock just paid a dividend of D0 = $1.50. The required rate of return is...
A stock just paid a dividend of D0 = $1.50. The required rate of return is rs = 8.0%, and the constant growth rate is g = 4.0%. What is the current stock price? Select the correct answer. a. $39.27 b. $39.00 c. $38.19 d. $38.46 e. $38.73
A stock just paid a dividend of Do = $1.50. The required rate of return is rs=15.0%, and the constant growth rate is g=4.0%. What is the current stock price?
QUESTION 23 A share of common stock just paid a dividend (D0) of $1.50. If the expected long-run growth rate for this stock is 5%, and if investors' required rate of return is 11.5%, what is the current stock price? 1. $17.57 2. $24.23 3. $17.13 4. $18.01 5. $16.28
. Mike works for a prominent technology company. His company just paid a $1.50 dividend per share. The required return for his company’s stock is 12%. A. If the dividend that Mike’s company just paid is a perpetual dividend, what is the price of the stock today? (Hint: Zero-growth Dividend Stock) B.(QUESTION 22) Mike’s company has decided to increase the company’s dividend by 6% forever, on an annual basis starting with the next dividend. If this is the case, what...
The market price of a stock is $21.22 and it just paid a dividend of $1.54. The required rate of return is 11.19%. What is the expected growth rate of the dividend?
Super Carpeting Inc. just paid a dividend ( D0 ) of $2.16, and its dividend is expected to grow at a constant rate (g) of 3.15% per year. If the required return ( rs ) on Super’s stock is 7.88%, then the intrinsic, or theoretical market, value of Super’s shares is per share. Which of the following statements is true about the constant growth model? When using a constant growth model to analyze a stock, if an increase in the...
National Advertising just paid a dividend of D0 = $0.75 per share, and that dividend is expected to grow at a constant rate of 6.50% per year in the future. The company's beta is 0.8, the required return on the market is 10.50%, and the risk-free rate is 4.50%. What is the company's current stock price? Select the correct answer. a. $29.21 b. $28.53 c. $28.87 d. $29.55 e. $28.19
National Advertising just paid a dividend of D0 = $0.75 per share, and that dividend is expected to grow at a constant rate of 6.50% per year in the future. The company's beta is 0.9, the required return on the market is 10.50%, and the risk-free rate is 4.50%. What is the company's current stock price? Select the correct answer. a. $23.04 b. $22.14 c. $22.59 d. $23.49 e. $21.69
A stock just paid a dividend of $1.3. The required rate of return is 11.6%, and the constant growth rate is 3%. What is the current stock price? Enter with two decimal places of precision (dollar and cents). Show Work!
El Taco Tote just paid a dividend of D0 = $1.75 per share, and that dividend is expected to grow at a constant rate of 5.50% per year in the future. The company's beta is 1.50, the required return on the market is 9.50%, and the risk-free rate is 3.50%. What is the company's current stock price?