Quantitative Problem 1: Hubbard Industries just
paid a common dividend, D0, of $2.00. It expects to grow
at a constant rate of 2% per year. If investors require a 9% return
on equity, what is the current price of Hubbard's common stock?
Round your answer to the nearest cent. Do not round intermediate
calculations.
$ per share?
Quantitative Problem 2: Carlysle Corporation
has perpetual preferred stock outstanding that pays a constant
annual dividend of $1.10 at the end of each year. If investors
require an 8% return on the preferred stock, what is the price of
the firm's perpetual preferred stock? Round your answer to the
nearest cent. Do not round intermediate calculations.
$ per share?
Quantitative Problem 3: Assume today is
December 31, 2013. Imagine Works Inc. just paid a dividend of $1.15
per share at the end of 2013. The dividend is expected to grow at
12% per year for 3 years, after which time it is expected to grow
at a constant rate of 5% annually. The company's cost of equity
(rs) is 9%. Using the dividend growth model (allowing
for nonconstant growth), what should be the price of the company's
stock today (December 31, 2013)? Round your answer to the nearest
cent. Do not round intermediate calculations.
$ per share?
I need help with these three problems.
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c. | What is your book balance? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) |
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explain all formulas and steps
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Reguired
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