A stock just paid a dividend of $1.15. The dividend is expected to grow at 27.42% for five years and then grow at 4.85% thereafter. The required return on the stock is 14.60%. What is the value of the stock?
Answer format: Currency: Round to: 2 decimal places.
The risk-free rate is 3.58% and the market risk premium is 7.47%. A stock with a β of 0.82 just paid a dividend of $2.61. The dividend is expected to grow at 23.29% for three years and then grow at 3.09% forever. What is the value of the stock?
Answer format: Currency: Round to: 2 decimal places.
The risk-free rate is 3.90% and the market risk premium is 6.48%. A stock with a β of 0.82 just paid a dividend of $1.61. The dividend is expected to grow at 22.99% for five years and then grow at 3.13% forever. What is the value of the stock?
Answer format: Currency: Round to: 2 decimal places.
i would really appreciate the help!! :)
Value of stock is equal to the present value of all future dividends
Year |
1 |
2 |
3 |
4 |
5 |
6 |
Dividends |
1.46533 |
1.867123486 |
2.379088746 |
3.03143488 |
3.862654324 |
4.049993059 |
Present value factor |
0.872600349 |
0.761431369 |
0.664425278 |
0.57977773 |
0.505914249 |
0.505914249 |
9.75 |
||||||
Present value |
1.278647469 |
1.421686392 |
1.580726703 |
1.757558433 |
1.954171863 |
21.01486358 |
Value of stock |
29.00765444 |
i.e. $29.01
Required return as per CAPM = Risk free rate + beta*market risk premium
= 9.2136%
Year |
1 |
2 |
3 |
4 |
5 |
6 |
Dividends |
1.980139 |
2.435372956 |
2.995265199 |
3.683876668 |
4.530799914 |
4.672613951 |
Present value factor |
0.91563688 |
0.838390897 |
0.767661625 |
0.702899296 |
0.643600518 |
0.643600518 |
6.0836 |
||||||
Present value |
1.813088297 |
2.041794517 |
2.29935015 |
2.589394315 |
2.916025173 |
49.43284833 |
Value of stock |
61.09250078 |
i.e. $61.09
A stock just paid a dividend of $1.15. The dividend is expected to grow at 27.42% for five years and then grow at 4.85%...
The risk-free rate is 3.90% and the market risk premium is 6.48%. A stock with a β of 0.82 just paid a dividend of $1.61. The dividend is expected to grow at 22.99% for five years and then grow at 3.13% forever. What is the value of the stock? Answer format: Currency: Round to: 2 decimal places. The risk-free rate is 2.30% and the market risk premium is 9.77%. A stock with a β of 1.49 just paid a dividend...
The risk-free rate is 3.90% and the market risk premium is 6.48%. A stock with a β of 0.82 just paid a dividend of $1.61. The dividend is expected to grow at 22.99% for five years and then grow at 3.13% forever. What is the value of the stock? Answer format: Currency: Round to: 2 decimal places. The risk-free rate is 2.30% and the market risk premium is 9.77%. A stock with a β of 1.49 just paid a dividend...
The risk-free rate is 3.90% and the market risk premium is 6.48%. A stock with a β of 0.82 just paid a dividend of $1.61. The dividend is expected to grow at 22.99% for five years and then grow at 3.13% forever. What is the value of the stock? Answer format: Currency: Round to: 2 decimal places. Please show all steps (not excel) and formulas used for better understanding~ Thank You!
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