Price of stock = expected dividend/(required rate of return - growth rate)
73.57 = 5(1+g)/(10%- g)
7.357 - 73.57g = 5+5g
G = 2.999%
I.e. 3%
Hence implied growth rate =3%
22) Marjens, Inc. just paid a dividend of $5. Marjen currently sells for $73.57. The return on stocks I Marjen , In...
Please add the following sentence to the question: "The company just paid $5 dividend." Question #5: SAPS company stocks are currently selling for $25 per share, and the required rate of return on the stock is 20%. What is the growth rate expected for the dividends assuming constant growth?
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...
5. Constant growth stocks Super Carpeting Inc. (SCI) just paid a dividend (D) of $1.92 per share, and its annual dividend is expected to grow at a constant rate (g) of 4.00% per year. If the required return (rs) on SCI's stock is 10.00%, then the intrinsic value of SCI's shares is per share. Which of the following statements is true about the constant growth model? O The constant growth model implies that dividends remain constant from now to a...
Newport Corporation's common stock currently sells for $160 per share. Newport just paid a dividend of $10.40 and dividends are expected to grow at a constant rate of 5 percent forever. If the required rate of return is 10 percent, what will Newport Corporation's stock sell for one year from now? a. $115 b. $168 c. $189 d. $2200
Holtzman Clothiers's stock currently sells for $18.00 a share. It just paid a dividend of $2.75 a share (i.e., Do = $2.75). 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. Farley Inc. has perpetual preferred stock outstanding that sells...
2. Rate of return implied in stock price A corporation has just paid a dividend of $5.00, i.e. Do=$5.00. Due to its growth potential, its dividends are expected to grow at 5% per year starting with the next dividend. If Jerry decides to buy the stock at the current market price $42, what rate of return will he earn? 3. Find the intrinsic value of a share of common stock A corporation has not paid dividend in the past and...
5) 10 points Stock currently sells for $45.10 per share and has a fixed 3.5% dividend growth rate. The required rate of return is 12 %. What was the amount of the last dividend that was just paid?
5. Constant growth stocks Super Carpeting Inc. (SCI) just paid a dividend (D ) of $1.44 per share, and its annual dividend is expected to grow at a constant rate (9) of 3.00% per year. If the required return (T) on SCI's stock is 7.50%, then the intrinsic value of SCI'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...
10. Harrison Clothiers' stock currently sells for $20.00 a share. It just paid a dividend of $1.00 a share (that is, Do = $1.00). The dividend is expected to grow at a constant rate of 6% a year. What stock price is expected 1 year from now? What is the required rate of return?
Woidtke Manufacturing's stock currently sells for $26 a share. The stock just paid a dividend of $1.50 a share (i.e., D0 = $1.50), and the dividend is expected to grow forever at a constant rate of 9% a year. What is the estimated required rate of return on Woidtke's stock? Round the answer to three decimal places Thanks!