The dividend on a common stock just paid this year was $2.25 while the dividend paid...
The dividend on a common stock just paid this year was $2.25 while the dividend paid 10 years ago was $1.05. The current dividend payout ratio is 40% and the investor's required return is 10%. What is the current P/E ratio for this stock?
19.23
Homework Answers
earnings = dividend/payout ratio
earnings = 2.25/0.4 = 5.625
growth in dividends = (2.25/1.05)^(1/10) - 1 = 0.07919350247
Price = Div1/(r - g)
Price = 2.25 * (1 + 0.07919350247) /(0.1 - 0.07919350247)
Price = 116.70322586
P/E = 116.70322586/5.625
P/E = 20.7472401529
= 20.75
Add Answer to:
The dividend on a common stock just
paid this year was $2.25 while the dividend paid...
A stock just paid an annual dividend of $2.7. The dividend is expected to grow by...
A stock just paid an annual dividend of $2.7. The dividend is expected to grow by 8% per year for the next 3 years. The growth rate of dividends will then fall steadily (linearly) from 8% after 3 years to 5% in year 6. The required rate of return is 12%. 1.What is the stock price if the dividend growth rate will stay 0.05 (5%) forever after 6 years? 2.In 6 years, the P/E ratio is expected to be 20...
Problem 2 Intro A stock just paid an annual dividend of $2. The dividend is expected...
Problem 2 Intro A stock just paid an annual dividend of $2. The dividend is expected to grow by 10% per year for the next 3 years. The growth rate of dividends will then fall steadily (linearly) from 10% after 3 years to 7% in year 6. The required rate of return is 12%. Part 1 Attempt 6/10 for 10 pts. What is the stock price if the dividend growth rate will stay 0.07 (7%) forever after 6 years? 1+...
The common stock of a firm paid a dividend of $1.75 in the year just ended....
The common stock of a firm paid a dividend of $1.75 in the year just ended. Suppose their dividend is expected to grow at a rate of 10% in the coming year, 8% in year two, and at a rate of 4% annually thereafter. If the required rate of return is 10%, what is the current value of their stock?
Holtzman Clothiers's stock currently sells for $31.00 a share. It just paid a dividend of $2.25...
Holtzman Clothiers's stock currently sells for $31.00 a share. It just paid a dividend of $2.25 a share (i.e., D0 = $2.25). The dividend is expected to grow at a constant rate of 10% a year. What stock price is expected 1 year from now? Round your answer to the nearest cent. What is the required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.
Holtzman Clothiers's stock currently sells for $28.00 a share. It just paid a dividend of $2.25...
Holtzman Clothiers's stock currently sells for $28.00 a share. It just paid a dividend of $2.25 a share (i.e., D0 = $2.25). The dividend is expected to grow at a constant rate of 10% a year. . What stock price is expected 1 year from now? Round your answer to two decimal places. What is the required rate of return? Do not round intermediate calculations. Round your answer to two decimal places.
3. ATP Industries paid a $0,50 dividend to its common shareholders 6 years ago. It just...
3. ATP Industries paid a $0,50 dividend to its common shareholders 6 years ago. It just paid a dividendo common shareholders. If dividends continue to grow at this rate for the foreseeable future, and the shares are won S10.05, what is the investor's required return?
The common stock of a firm paid a dividend of $1.75 in the year just ended. Suppose their dividend is expected to grow a...
The common stock of a firm paid a dividend of $1.75 in the year just ended. Suppose their dividend is expected to grow at a rate of 10% in the coming year, 8% in year two, and at a rate of 4% annually thereafter. If the required rate of return is 10%, what is the current value of their stock? I know the answer ($33.25) I want to know how to get the answer without a calculator (excel is fine).
21 points. Thomas Brothers just paid a $6.00 per share annual dividend. The dividend is expected to grow forever at...
21 points. Thomas Brothers just paid a $6.00 per share annual dividend. The dividend is expected to grow forever at a constant rate of 3 percent a year. The required rate of return on the common stock, res, is 11 percent. The current ratio is 1.95, the payout ratio is 40% and the tax rate is 35 %. a. What is your calculated value per share for the company's stock? b. If the current market price is $72.70 per share...
This morning you purchased a stock that just paid an annual dividend of $1.70 per share.
This morning you purchased a stock that just paid an annual dividend of $1.70 per share. You require a return of 9.5 percent and the dividend will increase at an annual growth rate of 2.6 percent. If you sell this stock in three years, what will your capital gain be? Multiple Choice $2.31 $2.60 $2.02 $2.66 Fowler is expected to pay a dividend of $1.53 one year from today and $1.68 two years from today. The company has a dividend payout ratio of 45 percent and...
Valuation of Stock 1) P. Noel Company's common stock has just paid a $2.00 dividend. If...
Valuation of Stock 1) P. Noel Company's common stock has just paid a $2.00 dividend. If investors believe that the expected rate of return on P. Noel is 14% and that dividends will grow at the rate of 5% per year for the foreseeable future, what is the value of a share of P. Noel stock? A) $15.00 B) $22.22 C) $23.33 D) $40.00 2) Green Company's common stock is currently selling at $24.00 per share. The company recently paid...
Problem 2 Intro A stock just paid an annual dividend of $2. The dividend is expected to grow by 10% per year for the next 3 years. The growth rate of dividends will then fall steadily (linearly) from 10% after 3 years to 7% in year 6. The required rate of return is 12%. Part 1 Attempt 6/10 for 10 pts. What is the stock price if the dividend growth rate will stay 0.07 (7%) forever after 6 years? 1+...
3. ATP Industries paid a $0,50 dividend to its common shareholders 6 years ago. It just paid a dividendo common shareholders. If dividends continue to grow at this rate for the foreseeable future, and the shares are won S10.05, what is the investor's required return?
21 points. Thomas Brothers just paid a $6.00 per share annual dividend. The dividend is expected to grow forever at a constant rate of 3 percent a year. The required rate of return on the common stock, res, is 11 percent. The current ratio is 1.95, the payout ratio is 40% and the tax rate is 35 %. a. What is your calculated value per share for the company's stock? b. If the current market price is $72.70 per share...
Most questions answered within 3 hours.
-
The financial records of Leon Paul Inc. were destroyed by fire
at the end of 2017....
asked 48 seconds from now -
The normal-curve approximation can also be used for discrete
distribution other than the binomial distribution. For...
asked 29 minutes ago -
1. Find the following z values for the standard normal
variable Z. (You may find it...
asked 25 minutes ago -
Lakeside Motors will sell you a $9000 car for $225 a month for 60
months. What...
asked 15 minutes ago -
how immigrants foster innovations and how it lead to economic
growth of the host country????
"Not...
asked 27 minutes ago -
What are some of the methods that creditors use to
reduce risk in credit transactions?
asked 21 minutes ago -
1 Explain HOW you would use the scientific method to test
which helps kids lose weight:...
asked 28 minutes ago -
Given the complexities involved with supply chains, might it
make sense for a business to vertically...
asked 29 minutes ago -
MARKET EFFICIENCY IN-CLASS WORKSHEET 2 This question examines
the market for peanut butter. You will use...
asked 42 minutes ago -
An ideal gas (which is is a hypothetical gas that conforms to
the laws governing gas...
asked 45 minutes ago -
. If economic profits exist in perfect competition, in the long
run firms will enter because...
asked 49 minutes ago -
calculate the oxidation state of carbons C18H36O2 and
C18H36018
and then calculated the number of electrons...
asked 1 hour ago