Question

In: Finance

The common stock of Water Town Mills pays a constant annual dividend of $2.25 a share....

The common stock of Water Town Mills pays a constant annual dividend of $2.25 a share. What is one share of this stock worth at a discount rate of 16.02 percent?

Solutions

Expert Solution

g = 0


Related Solutions

The common stock of Textile Mills pays an annual dividend of $1.65 a share. The company...
The common stock of Textile Mills pays an annual dividend of $1.65 a share. The company has promised to maintain a constant dividend even though economic times are tough. How much are you willing to pay for one share of this stock if you want to earn a 12 percent annual return?
Unique stores common stock pays a constant annual dividend of $1.75 a share. What is the...
Unique stores common stock pays a constant annual dividend of $1.75 a share. What is the value of this stock at a discount rate of 13.25 percent? a. $12.50 b. $13.33 c. $13.21 d. $12.88 e. $14.18 (Please show steps and you can use a financial calculator as well).
Weisbro and Sons common stock sells for $21 a share and pays an annual dividend that...
Weisbro and Sons common stock sells for $21 a share and pays an annual dividend that increases by 5.4 percent annually. The market rate of return on this stock is 9.4 percent. What is the amount of the last dividend paid by Weisbro and Sons? $.74 $1.08 $1.87 $.80 $.89
A company currently pays a dividend of $2.25 per share (D0 = $2.25).
Nonconstant Growth ValuationA company currently pays a dividend of $2.25 per share (D0 = $2.25). It is estimated that the company's dividend will grow at a rate of 18% per year for the next 2 years, then at a constant rate of 5% thereafter. The company's stock has a beta of 1.3, the risk-free rate is 3%, and the market risk premium is 3%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your...
A zero-growth common stock pays the annual dividend of $ 1.75 per share at the end...
A zero-growth common stock pays the annual dividend of $ 1.75 per share at the end of each year. If the required rate of return on the common stock is 11.2 %, what is the price per share of the common stock today?
Crisp Cookware's common stock is expected to pay a dividend of $2.25 a share at the end of this year (D1 = $2.25)
Crisp Cookware's common stock is expected to pay a dividend of $2.25 a share at the end of this year (D1 = $2.25); its beta is 0.70; the risk-free rate is 3.4%; and the market risk premium is 6%. The dividend is expected to grow at some constant rate g, and the stock currently sells for $39 a share. Assuming the market is in equilibrium, what does the market believe will be the stock's price at the end of 3...
A company currently pays a dividend of $2.25 per share (D0 = $2.25). It is estimated...
A company currently pays a dividend of $2.25 per share (D0 = $2.25). It is estimated that the company's dividend will grow at a rate of 17% per year for the next 2 years, and then at a constant rate of 6% thereafter. The company's stock has a beta of 1.2, the risk-free rate is 6%, and the market risk premium is 4%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer...
a. Suppose a company currently pays an annual dividend of $3.20 on its common stock in...
a. Suppose a company currently pays an annual dividend of $3.20 on its common stock in a single annual installment, and management plans on raising this dividend by 6 percent per year indefinitely. If the required return on this stock is 12 percent, what is the current share price? b. Now suppose the company in (a) actually pays its annual dividend in equal quarterly installments; thus, the company has just paid a dividend of $.80 per share, as it has...
Lina buys a common stock that pays annual dividends. The first dividend of $25 is at...
Lina buys a common stock that pays annual dividends. The first dividend of $25 is at the end of the third year and each subsequent annual dividend is $4 greater than the preceding one. Calculate the price of this stock given an effective annual interest rate of 4.5 %
________ 8.            Baker Industrial Supply pays a constant annual dividend of 1.40 per share. The firm’s...
________ 8.            Baker Industrial Supply pays a constant annual dividend of 1.40 per share. The firm’s stock is selling for                                 $32.70 a share and has a market return of 14.08 percent. What is the capital gains yield?                                 a. 9.80 percent                        b. 10.71 percent                      c. 14.04 percent                        d. 14.08 percent ________ 9.         Global Exporters recently announced that it will pay annual dividends of $1.10; $1.25, and $1.30 a share over the next three years, respectively. After that, the firm...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT