(7) (a) Expected Dividend 23 Years from Now = D23 = $ 3, Perpetual Growth Rate = 3 % and Required Return = 8%
Price after 22 years = P22 = 3 / (0.08-0.03) = $ 60
(b) Current Price = 60 / (1.08)^(22) = $ 11.0364 ~ $ 11.04
NOTE: please raise separate queries for solutions to the remaining unrelated questions as one query is restricted to the solution of only one complete question with up to four sub-parts.
please answer all questions with work 7. Santhana Muku, Inc. (SMI) stock is expected to pay a dividend of $3.00 twe...
#8 please b. Calculate today's price for SMI stock. 8. String Cheeses, Inc. is considering a project with an initial outlay of $8222.82 & CFs in each of years 1-6 = $2000. Compute the project's IRR. 9. Wyoming Natural Gas, Inc. is weighing a drilling venture into the Teton Mountains. The venture re- quires an initial outlay of $73M, but is anticipated to generate a perpetual series of $10M cash flows starting one year from today 12 5% is the...
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10. Your task is to value a share of Supernormal Corp. stock using a required return of 10%/yr. The stock is expected to pay a dividend of $1.20 one year from now. Dividends are then expected to grow by 15%/yr. for two years. The growth rate is expected to drop to 12%/yr. for the next three years. After that, the growth is expected to be stable at 3%/yr. forever.
A stock is expected to pay a dividend in 1 year of $3.00. Dividends are expected to grow at a rate of 15% in year 2 and year 3, and then slow down to 4% per year in perpetuity thereafter. The required return is 18%. An analyst mistakenly uses the constant growth dividend discount model and assumes the perpetual growth rate will be 15% forever. By how much does he overestimate or underestimate the stock's actual value? A. Overestimates by...
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Find the price today of a young growth company's stock that is not expected to pay any dividends for the next nine years, but ten years from now the stock is expected to pay a dividend of $4 per share and then grow this dividend by 3% per year forever. Investors expect a 10% annual return on this stock. Your Answer:
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