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In: Finance
You have forecast that United Sports, Inc. will pay a dividend of $0 next year (in...
You have forecast that United Sports, Inc. will pay a dividend of $0 next year (in time 1), $.20 two years from now (in time 2), $.50 three years from now (in time 3) and $1.00 four years from now (in time 4). For dividends beyond four years, you assume they will increase at 6% per year from the prior year. If the discount rate is 9%, calculate a fair price for the stock of United Sports, Inc.
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jeff jeffy answered 2 years agoRelated Solutions
Nut and Bolt Guy, Inc., will pay a $1.10 dividend next year. This dividend is expected...
Nut and Bolt Guy, Inc., will pay a $1.10 dividend next year.
This dividend is expected to grow by 6% percent for years 2 and 3.
Following this, the firm expects the dividend by 3% in perpetuity.
The firms cost of equity is 10%
Given this information, what is the intrinsic value of the
stock?
A)$24.0
B)$33.8
C)$26.8
D)$ 3.75
1. You think CCLC will pay dividend next year and the first dividend will be $20...
1. You think CCLC will pay dividend next year and the first
dividend will be $20 a share. You expect GOOG to grow dividend at
9% a year. If your required return for GOOD is 11.3%, what would be
the price in 7 years?
2. CCLC will pay an annual dividend of $2 next year. The company
just announced that future dividends will be increasing by 8%
annually. Would you buy this stock at $42 a share if your required...
Abacus Inc. issues common stock that is expected to pay a dividend $2.5 next year at...
Abacus Inc. issues common stock that is expected to pay a
dividend $2.5 next year at a current price of $25 per share. If its
expected dividend growth is 4%, what is Abacus's WACC, given it is
financed by 20% debt with after-tax cost of debt 3.5% and the rest
is financed with common equity? Tax rate is 35%.
A.
13.5%
B.
11.9%
C.
11.5%
D.
12.2%
E.
14%
Tyco Inc plans to pay a dividend of $1.65 next year. After that the firm expects...
Tyco Inc plans to pay a dividend of $1.65 next year. After that
the firm expects dividends to grow 3.5% for 3 years, than 6.5% for
4 years, than 12% for three years, and 4% thereafter. The required
return is 8% what should the price of the stock be?
If you could show steps and formulas used, that would be
great
A stock expects to pay a dividend of $3.72 per share next year. The dividend is...
A stock expects to pay a dividend of $3.72 per share next year.
The dividend is expected to grow at 25 percent per year for three
years followed by a constant dividend growth rate of 4 percent per
year in perpetuity. What is the expected stock price per share 5
years from today, if the required return is 12 percent?
Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $1.40 next year....
Red, Inc., Yellow Corp., and Blue Company each will pay a
dividend of $1.40 next year. The growth rate in dividends for all
three companies is 4 percent. The required return for each
company's stock is 9.00 percent, 12.50 percent, and 15.10 percent,
respectively.
What is the stock price for Yellow Corp.?
Question 1 Aluworks Co. is expected to pay a $21.00 dividend next year. The dividend will...
Question 1
Aluworks Co. is expected to pay a $21.00 dividend next year. The
dividend will decline by 10 percent annually for the following
three years. In year 5, Aluworks will sell off assets worth $100
per share. The year 5 dividend, which includes a distribution of
some of the proceeds of the asset sale, is expected to be $60. In
year 6, the dividend is expected to decrease to $40 and will be
maintained at $40 for one additional...
Stock C is expected to pay a dividend of $5.80 next year. Thereafter, dividend growth is...
Stock C is expected to pay a dividend of $5.80 next year.
Thereafter, dividend growth is expected to be 19.00% a year for
five years (i.e., years 2 through 6) and zero thereafter.
If the market capitalization rate for each stock is 9.00%, what
is the stock price for each of the stock C?
Consider the stock of SLB Inc., a growth stock that will pay no dividend the next...
Consider the stock of SLB Inc., a growth stock that will pay no
dividend the next year. Starting in year two, the company will pay
a dividend of $3 and will increase it by 10% for the next three
years. Afterwards, dividends will grow by 5% per year indefinitely.
The stock has a required rate of return of 15%.
Consider the stock of SLB Inc., a growth stock that will pay no dividend the next...
Consider the stock of SLB Inc., a growth stock that will pay no
dividend the next year. Starting in year two, the company will pay
a dividend of $3 and will increase it by 10% for the next three
years. Afterwards, dividends will grow by 5% per year indefinitely.
The stock has a required rate of return of 15%. Answer the
following questions. (SHOW YOUR WORK. Correct answers with no
formulas/calculations receive no credit)
a) What is the value (price)...
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