Question

The Fl Corporations dividends per share are expected to grow indefinitely by 8% per year a. If this years year-end dividend

0 0
Add a comment Improve this question Transcribed image text
Answer #1

a) Current stock price 01/(r-g) $ 200.00 -4/(10%-8%) b) Value of ROE g/RR 12.00% -8%/((12-4)/12) c) Amount [D1/(r-g)) - E/r $

*Please rate thumbs up

Add a comment
Know the answer?
Add Answer to:
The Fl Corporation's dividends per share are expected to grow indefinitely by 8% per year a....
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • The Fl Corporation's dividends per share are expected to grow indefinitely by 8% per year. a....

    The Fl Corporation's dividends per share are expected to grow indefinitely by 8% per year. a. If this year's year-end dividend is $3.00 and the market capitalization rate is 10% per year, what must the current stock price be according to the DDM? b. If the expected earnings per share are $9.00, what is the implied value of the ROE on future investment opportunities? (Round your answer to 2 decimal places.) c. How much is the market paying per share...

  • Problem 18-11 The Fl Corporation's dividends per share are expected to grow indefinitely by 5% per...

    Problem 18-11 The Fl Corporation's dividends per share are expected to grow indefinitely by 5% per year. a. If this year's year-end dividend is $7.50 and the market capitalization rate is 8% per year, what must the current stock price be according to the DOM? Current stock price b. If the expected earnings per share are $15.00, what is the implied value of the ROE on future investment opportunities? (Round your answer to 2 decimal places.) Value of ROE c....

  • The FI Corporation's dividends per share are expected to grow indefinitely by 6% per year a....

    The FI Corporation's dividends per share are expected to grow indefinitely by 6% per year a. If this year's year-end dividend is $9 and the market capitalization rate is 12% per year, what must the current stock price be according to the DDM? (Do not round intermediate calculations. Round your answer to 2 decimal places.]) Current stock price b. If the expected earnings per share are $15, what is the implied value of the ROE on future investment opportunities? (Do...

  • The FI Corporation’s dividends per share are expected to grow indefinitely by 8% per year. a....

    The FI Corporation’s dividends per share are expected to grow indefinitely by 8% per year. a. If this year’s year-end dividend is $4.00 and the market capitalization rate is 10% per year, what must the current stock price be according to the DDM? b. If the expected earnings per share are $16.00, what is the implied value of the ROE on future investment opportunities? (Round your answer to 2 decimal places.) c. How much is the market paying per share...

  • Company's Z's earnings and dividends per share are expected to grow indefinitely by 3% a year....

    Company's Z's earnings and dividends per share are expected to grow indefinitely by 3% a year. Assume next year's dividend per share is $2 and next year's EPS is $3. The market capitalization rate is 9%. If Company Z were to distribute all of its earnings, it could maintain a level dividend stream of $3 a share. How much is the market actually paying per share for growth opportunities? (Do not round intermediate calculations. Negative amount should be indicated by...

  • Company Z's earnings and dividends per share are expected to grow indefinitely by 3% a year....

    Company Z's earnings and dividends per share are expected to grow indefinitely by 3% a year. Assume next year's dividend per share is $19 and next year's EPS is $4. The market capitalization rate is 11%. If Company Z were to distribute all of its earnings, it could maintain a level dividend stream of $4 a share. How much is the market actually paying per share for growth opportunities?

  • 10. Company Z's earnings and dividends per share are expected to grow indefinitely by 5% a...

    10. Company Z's earnings and dividends per share are expected to grow indefinitely by 5% a year. If next year's dividend is $10 and the market capitalization rate is 8%. If company Z were to distribute all its earnings, it could maintain a level dividend stream of $15 a share(EPS-15) How much is the market actually paying per share for growth opportunities? (a) $122.90 (b) $137.55 (c) $145.83 (d) $157.44

  • Company Z prime's earnings and dividends per share are expected to grow by 2% a year....

    Company Z prime's earnings and dividends per share are expected to grow by 2% a year. Its growth will stop after year 4 In year 5 and afterward it will pay out all eamings as dividends Assume next year's dividend is $6, the market capitalization rate is 12% and next year's EPS is $11. What is Z-prime's stock price? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Stock price

  • Assume your firm's dividends per share are expected to grow indefinitely by 3% a year. Next...

    Assume your firm's dividends per share are expected to grow indefinitely by 3% a year. Next year's dividend is $4.50 and the required rate of return (i.e. equity holder's opportunity cost of capital) is 8%. Assuming this is the best information available regarding the future of this firm, what would be the most economically rational value of the stock today (i.e. today's "price")? 56.25 150.00 90.00 92.70 45.00

  • Che The Duo Growth Company just paid a dividend of $1.00 per share. The dividend is expected to grow at a rate of 26% p...

    Che The Duo Growth Company just paid a dividend of $1.00 per share. The dividend is expected to grow at a rate of 26% per year for the next three years and then to level off to 5% per year forever. You think the appropriate market capitalization rate is 21% per year. a. What is your estimate of the intrinsic value of a share of the stock? (Use intermediate calculations rounded to 4 decimal places. Round your answer to 2...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT