If constant growth is there.
Price of Stock = DPS1 / ( Required return - Growth )
Price of Stock at 6th year = 1.51 / ( 13% - 10% ) = $ 50.33.
Current price of stock = [ $ 50.33 / ( 1 + 0.13 )5 ]= $ 27.32
The Peterman Company does not currently pay dividends. However, investors expect that, in 6 years, Peterman will pay it...
Hayworth Industries does not currently pay dividends. However, investors expect that, in 4 years, Hayworth will pay its first dividend of $ 2.08 per share and will continue to grow at 12% per year forever. If investors require a 13% annual return on the stock, what is the current price?
QUESTION 29 Walt Disney Corp does not currently pay a dividend, however, in 5 years you expect they will pay their first dividend and it will be $3.8 per share. The dividend is expected to grow at a rate of 2.4% and investors' required rate of return for Walt Disney Corp stockis 9.9% per year. What should be the price of Walt Disney Corp stock today!
ABC Company is not expected to pay any dividends for the next 3 years. Beginning 4 years from today, investors expect to receive a dividend of $2 per share for 3 years and then a dividend of $3 per share for each of the next 4 years. Then dividends are expected to grow at 4% per year forever. If investors require a 15% return, what is the price per share? Do not use excel. Need to understand this writing out...
Investors require a return of 14.8% per year to hold a stock. The stock currently does not pay any dividends and is expected to begin paying a dividend of $1.65 in 3 years from now, then the dividends are expected to grow forever at a constant rate of 8.0%. What's the stock price? A) $13.74 OB) $16.05 OC) $17.34 D) $18.41 O E) $15.72
Investors require a return of 14.8% per year to hold a stock. The stock currently does not pay any dividends and is expected to begin paying a dividend of $1.65 in 3 years from now, then the dividends are expected to grow forever at a constant rate of 8.0%. What’s the stock price? A) $15.72 B) $16.05 C) $18.41 D) $17.34 E) $13.74
Dynasty Corp. will pay a $3 dividend in one year. If investors expect that dividend to remain constant forever, and they require a 10% return on Dynasty stock, what is the stock worth? What is the stock worth if investors expect Dynasty’s dividends to grow at 3% per year?
Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Computech to begin paying dividends, beginning with a dividend of $1.25 coming 3 years from today. The dividend should grow rapidly - at a rate of 30% per year - during Years 4 and 5, but after Year 5, growth should be a constant 9% per year. If the required return on Computech is 13%, what is...
(a) Union Pacific currently does not pay a dividend. You expect that the company will begin paying a dividend of $2 per share in 6 years, and you expect dividends to grow indefinitely at a 3.5% rate per year thereafter. If the required rate of return is 12 percent, how much is the stock currently worth? [8 Points) (b) Walmart Inc. just paid a dividend of do = $2.08 per share. The dividends are expected to grow at a rate...
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 $0.50 coming 3 years from today. The dividend should grow rapidly - at a rate of 75% per year - during Years 4 and 5. After Year 5, the company should grow at a constant rate of 10% per year. If the required return on the stock...
Netscrape Communications does not currently pay a dividend. You expect the company to begin paying a dividend of $2.20 per share in 8 years, and you expect dividends to grow perpetually at 3.2 percent per year thereafter. If the discount rate is 14 percent, how much is the stock currently worth? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Price