Question

1

A stock just paid a dividend of $1.13. The dividend is expected to grow at 23.73% for three years and then grow at 3.39% thereafter. The required return on the stock is 14.90%. What is the value of the stock?

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#2

A stock just paid a dividend of $3.00. The dividend is expected to grow at 24.07% for five years and then grow at 4.10% thereafter. The required return on the stock is 11.21%. What is the value of the stock?

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#3

A stock just paid a dividend of $1.46. The dividend is expected to grow at 24.14% for two years and then grow at 3.55% thereafter. The required return on the stock is 11.92%. What is the value of the stock?

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#4

The risk-free rate is 1.79% and the market risk premium is 4.64%. A stock with a β of 1.32 will have an expected return of ____%.

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Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924))

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#5

The risk-free rate is 3.14% and the expected return on the market 8.11%. A stock with a β of 1.17 will have an expected return of ____%.

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Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924))

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Answer 1

1)

B49 X fx B A =+B48*1.0339 C PVIF @ 14.9% D Present value 45 1.22 46 01 47 D2 48 D3 49 D4 50 Share price in 3 years $ $ $ $ $ 1.40 1.73 2.14 2.21 19.23 0.870 $ 0.757 $ 0.659 $ 1.31 1.41 0.659 $ 12.67 51 2.21/(14.9%-3.39%) 52 Intrinsic value of the stock $ 16.61

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