Value of stock=D1/(Equity cost of capital-Growth rate)
=(1.2*1.05)/(0.1-0.05)
which is equal to
=$25.2
Shield Security pays annual dividends and has just paid this year's dividend of $1.20. If its...
JBK, Inc. normally pays an annual dividend. The last such dividend paid was $2.50, all future dividends are expected to grow at 5 percent, and the firm faces a required rate of return on equity of 11 percent. If the firm just announced that the next dividend will be an extraordinary dividend of $17 per share that is not expected to affect any other future dividends, what should the stock price be? (Do not round intermediate calculations and round your...
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Sheridan Tire Co. just paid an annual dividend of $1.20 on its common shares. If Sheridan is expected to increase its annual dividend by 3.10 percent per year into the foreseeable future and the current price of Sheridan’s common shares is $15.54, what is the cost of common stock for Sheridan?
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: Common Share It pays annual dividends and a $4 dividend was paid yesterday. As per the market consensus, the company’s dividend is expected to decrease by 10% per annum in the first two years. Then its dividend will grow by 25% for next three years. After that, the dividend growth rate will become 5% p.a. constant till foreseeable future. Peters required rate of return on this investment is 20% per annum
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A company has just paid its first dividend of $3.30. Next year's dividend is forecast to grow by 7 percent, followed by another 7 per cent growth in year two. From year three onwards dividends are expected to grow by 2.5 percent per annum, indefinitely. Investors require a rate of return of 12 percent p.a. for investments of this type. The current price of the share is (round to nearest cent)
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