QUESTION 12
You've collected the following information from a financial web site.
52-Week Price | Stock (Div) | Div Yld % |
PE Ratio |
Close Price |
Net Chg |
|
Hi | Lo | |||||
77.40 | 10.43 | Palm Coal 0.36 | 2.6 | 6 | 13.90 | –0.24 |
56.56 | 34.17 | Lake Lead Grp 2.29 | 5.6 | 10 | 41.18 | –0.01 |
130.93 | 69.50 | SIR 2.00 | 2.2 | 10 | 88.97 | 3.07 |
According to your research, the growth rate in dividends for Palm Coal for the previous 10 years has been 4.31 percent. If investors feel this growth rate will continue, what is the required return for Palm Coal stock? (Do not include the percent sign (%). Round your answer to 2 decimal places (e.g., 32.16).)
Required Return for Palm Coal Stock
Dividend in Next Year (D1)
D1 = D0 x (1 + g)
= $0.36 x (1 + 0.0431)
= $0.3755 per share
Here, we’ve Current Market Price (P0) = $13.90 per share
Dividend growth rate (g) = 4.31% per year
Dividend in year 1 (D1) = $0.3755 per share
Therefore, The Required Return = [D1 / P0] + g
= [$0.3755 / $13.90] + 0.0431
= 0.0270 + 0.0431
= 0.0701 or
= 7.01% (Rounded to 2 decima place)
“Hence, the required return for Palm Coal stock will be 7.01%”
QUESTION 12 You've collected the following information from a financial web site. 52-Week Price Stock (Div)...
You've collected the following information from a financial web site. 52-Week Price Stock (Div) Div Yld % PE Ratio Close Price Net Chg Hi Lo 77.40 10.43 Palm Coal 0.36 2.6 6 13.90 –0.24 56.56 34.17 Lake Lead Grp 2.29 5.6 10 41.18 –0.01 130.93 69.50 SIR 2.00 2.2 10 88.97 3.07 What was the highest dividend yield over the past year? What was the lowest dividend yield over the past year?
You’ve collected the following information from your favorite financial website. 52-Week Price Stock (Div) Div Yld % PE Ratio Close Price Net Chg Hi Lo 77.40 10.43 Palm Coal .36 2.6 6 13.90 –.24 55.81 33.42 Lake Lead Grp 1.54 3.8 10 40.43 –.01 130.93 69.50 SIR 2.00 2.2 10 88.97 3.07 50.27 13.98 DR Dime .83 5.4 6 15.46 –.26 35.00 20.74 Candy Galore .32 1.5 28 ?? .18 According to your research, the growth rate in...
You’ve collected the following information from your favorite financial website. 52-Week Price Stock (Div) Div Yld % PE Ratio Close Price Net Chg Hi Lo 77.40 10.43 Palm Coal .36 2.6 6 13.90 –.24 55.81 33.42 Lake Lead Grp 1.54 3.8 10 40.43 –.01 130.93 69.50 SIR 2.00 2.2 10 88.97 3.07 50.38 14.09 DR Dime .94 6.0 6 15.57 –.26 35.00 20.74 Candy Galore .32 1.5 28 ?? .18 According to your research, the growth rate in dividends for...
You've collected the following information from your favorite financial website. 52-Week Price Div Yld % 2.6 PE Ratio Lo 10 Hi 77.40 55.81 130.93 50.40 35.00 10.43 33.42 69.50 14.11 20.74 Stock (Div) Palm Coal 36 Lake Lead Grp 1.54 SIR 2.00 DR Dime.96 Candy Galore 32 3.8 22 Close Price 13.90 40.43 88.97 15.59 ?? Net Chg - 24 -01 3.07 - 26 18 10 28 According to your research, the growth rate in dividends for DR Dime for...
You’ve collected the following information from your favorite financial website. 52-Week Price Stock (Div) Div Yld % PE Ratio Close Price Net Chg Hi Lo 77.40 10.43 Palm Coal .36 2.6 6 13.90 –.24 56.21 33.82 Lake Lead Grp 1.94 4.8 10 40.83 –.01 130.93 69.50 SIR 2.00 2.2 10 88.97 3.07 50.24 13.95 DR Dime .80 5.2 6 15.43 –.26...
You've collected the following information from your favorite financial website. 52-Week Price Hi 77.40 55.81 130.93 50.35 35.00 Lo 10.43 33.42 69.50 14.06 20.74 Stock (Div) Palm Coal.36 Lake Lead Grp 1.54 SIR 2.00 DR Dime .91 Candy Galore .32 Div Yld % 2.6 3.8 2.2 5.9 1. 5 PE Ratio 6 10 10 6 2 8 Close Price 13.90 40.43 88.97 15.54 ?? Net Chg -.24 -.01 3.07 -.26 18 According to your research, the growth rate in dividends...
You've collected the following information from your favorite financial website. 52-Week Price Div Yld % 2.6 3.8 77.40 55.81 130.93 50.24 35.30 Lo 10.43 33.42 69.50 13.95 20.77 Stock (Div) Palm Coal.36 Lake Lead Grp 1.54 SIR 2.00 DR Dime.80 Candy Galore 0.35 PE Close Net Ratio Price Chg 6 13.90 - 24 10 40.43 -01 10 88.97 3.07 6 15.43 - 26 28 ?? 18 5.2 1.5 a. Using the dividend yield, calculate the closing price for Candy Galore...
You've collected the following information from your favorite financial website. 52-Week Price PE Ratio Hi 77.40 55.81 130.93 50.41 35.00 Lo 10.43 33.42 69.50 14.12 20.74 Stock (Div) Palm Coal.36 Lake Lead Grp 1.54 SIR 2.00 DR Dime.97 Candy Galore.32 Div Yld % 2.6 3.8 2.2 6.2 1.5 10 10 6 28 Close Price 13.90 40.43 88.97 15.60 ?? Net Chg -24 -.01 3.07 -26 18 According to your research, the growth rate in dividends for DR Dime for the...
You’ve collected the following information from your favorite financial website. 52-Week Price Stock (Div) Div Yld % PE Ratio Close Price Net Chg Hi Lo 77.8 10.47 Palm Coal .40 2.8 6 14.30 –.24 55.81 33.42 Lake Lead Grp 1.54 3.8 10 40.43 –.01 130.93 69.50 SIR 2.00 2.2 10 88.97 3.07 50.24 13.95 DR Dime .80 5.2 6 15.43 –.26 35.00 20.74 Candy Galore .32 1.5 28 ?? .18 According to your research, the growth rate in...
Chapter 7, Question #9 You've collected the following information from your favorite financial website. 52-Week Price PE Ratio points 8 01:29:14 Hi 77.40 55.81 130.93 50.43 35.00 Lo 10.43 33.42 69.50 14.14 20.74 Stock (Div) Palm Coal.36 Lake Lead Grp 1.54 SIR 2.00 DR Dime.99 Candy Galore.32 Div Yld % 2.6 3.8 2.2 6.3 1.5 10 10 Close Price 13.90 40.43 88.97 15.62 ?? Net Chg -24 -.01 3.07 -26 18 Skipped 28 eBook According to your research, the growth...