Question
In: Finance
MM company expects to grow at a rate of 25per cent for the next 5 years...
MM company expects to grow at a rate of 25per cent for the next 5 years and then settle to a constant-growth rate of 6 per cent. The company's recent dividend was $2.35. The required rate of return is 15 per cent
a.Find the present value of the dividends during the rapid growth
b.What is the price of the share at the end of year
c.What is the price of the share today
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Trentham Estate Ltd expects to grow at a rate of 22 per cent for the next 5 years and then settle to a constant-growth rate of 6 per cent.
Trentham Estate Ltd expects to grow at a rate of 22 per cent for
the next 5 years and then settle to a constant-growth rate of 6 per
cent.The company’s most recent dividend was $2.35.The required rate of return is 15 per cent.a Find the present value of the dividends during the rapid
growth period.b What is the price of the share at the end of year 5?c What is the price of the share today?
Magnetic Corporation expects dividends to grow at a rate of 17% for the next two years....
Magnetic Corporation expects dividends to grow at a rate of 17%
for the next two years. After two years dividends are expected to
grow at a constant rate of 6.1%, indefinitely. Magnetic’s required
rate of return is 11.2% and they paid a $1.65 dividend today. What
is the value of Magnetic Corporation’s common stock per share?
(Show your answers to the nearest cent) What is
Dividend at end of year 1:
What is Dividend at end of year 2:
What...
Magnetic Corporation expects dividends to grow at a rate of 19.9% for the next two years....
Magnetic Corporation expects dividends to grow at a rate of 19.9%
for the next two years. After two years, dividends are expected to
grow at a constant rate of 6.4%, indefinitely. Magnetic’s required
rate of return is 14.6% and they paid a $1.36 dividend today. What
is the value of Magnetic Corporation’s common stock per share
today? (Show your answers to the nearest cent.)
Magnetic Corporation expects dividends to grow at a rate of 17% for the next two years....
Magnetic Corporation expects dividends to grow at a rate of 17%
for the next two years. After two years dividends are expected to
grow at a constant rate of 6.1%, indefinitely. Magnetic’s required
rate of return is 11.2% and they paid a $1.65 dividend today. What
is the value of Magnetic Corporation’s common stock per share?
(Show your answers to the nearest cent)
Dividend at end of year 1:
Dividend at end of year 2:
Dividend at end of year...
McGaha Enterprises expects earnings and dividends to grow at a rate of 29% for the next...
McGaha Enterprises expects earnings and dividends to grow at a
rate of 29% for the next 4 years, after the growth rate in earnings
and dividends will fall to zero, i.e., g = 0. The company's last
dividend, D0, was $1.25, its beta is 1.20, the market risk premium
is 5.50%, and the risk-free rate is 3.00%. What is the current
price of the common stock?
MGM Enterprises expects earnings and dividends to grow at a rate of 25% for the next...
MGM Enterprises expects earnings and dividends to grow at a
rate of 25% for the next 4 years, after that the growth rate in
earnings and dividends will fall to zero, i.e., g = 0. The
company's last dividend, D0, was $1.25, its beta is
1.20, the market risk premium is 5.50%, and the risk-free rate is
3.00%. What is the current price of the common stock?
McGaha Enterprises expects earnings and dividends to grow at a rate of 40% for the next...
McGaha Enterprises expects earnings and dividends to grow at a
rate of 40% for the next 4 years, after the growth rate in earnings
and dividends will fall to zero, i.e., g = 0. The company's last
dividend, D0, was $1.25, its beta is 1.20, the market risk premium
is 5.50%, and the risk-free rate is 3.00%. What is the current
price of the common stock? Select the correct answer. a. $44.24 b.
$44.98 c. $45.72 d. $43.50 e. $46.46
A stock is expected to grow at a rate of 22% for the next three years....
A stock is expected to grow at a rate of 22% for the
next three years. A recent dividend paid was $1.35 per share. After
three years, the stock is expected to grow at a constant rate of
12% per year. If the minimum acceptable rate of return is 14%, what
is the current expected price? Show all work.
Orange Company dividends will grow at 8% during the next 4 years, 7% during year 5,...
Orange Company dividends will grow at 8% during the next 4
years, 7% during year 5, after that they will grow at a 6%. Last
year dividend was $1.50. The risk-free rate of return is 4% and the
risk premium is 5% What is the value of the stock? Please show
calculations
Fresno Corp. is a fast-growing company whose management that expects to grow at a rate of...
Fresno Corp. is a fast-growing company whose management that
expects to grow at a rate of 26 percent over the next two years and
then to slow to a growth rate of 20 percent for the following three
years. The required rate of return is 14 percent. If the last
dividend paid by the company was $2.15.
What is the dividend for 1st year? (Round answer to
3 decimal places, e.g. 15.250.)
D1
$
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