Seagate Technology is a global leader in data storage solutions and a high-yield dividend payer. From...
Seagate Technology is a global leader in data storage solutions and a high-yield dividend payer. From 2015 through 2019, Seagate paid the following per-share dividends:
|
Year |
Dividend per share |
2019 $2.49
2018 2.24
2017 1.88
2016 1.16
2015 1.47
Assume that the historical annual growth rate of Seagate dividends is an accurate estimate of the future constant annual dividend growth rate. Use a 22% required rate of return to find the value of Seagate's stock immediately after it paid its 2019 dividend of $2.49.
The value of Seagate's stock is $....
Homework Answers
| Annual average growth rate=((last value/First value)^(1/Time between 1st and last value)-1)*100 |
| Annual Growth rate=((2.49/1.47)^(1/4)-1)*100 |
| Annual Growth rate% = 14.08 |
| Price = recent dividend* (1 + growth rate )/(cost of equity - growth rate) |
| Price = 2.49 * (1+0.1408) / (0.22 - 0.1408) |
| Price = 35.87 |
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Seagate Technology is a global leader in data storage solutions
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