Assume the last dividend was $1.15 and the company is growing at a constant rate of...

Assume the last dividend was $1.15 and the company is growing at a constant rate of 7% per year. Investors require 13% to invest in this company. What is the capital gains yield for the first year?

Expert Solution

Capital gains yield = Growth rate = 7%

jeff jeffy answered 2 years ago

A company is growing at a constant rate of 8 percent. Last week it paid a...

A company is growing at a constant rate of 8 percent. Last week it paid a dividend of $3.00. If the required rate of return is 15 percent, what is the price of the share three years from now? a. $42.83. b. $46.29. c. $58.31. d. $51.02. e. $48.30.

Assume that Globeworks is a constant growth company whose last dividend was $1.70 and whose dividend...

Assume that Globeworks is a constant growth company whose last dividend was $1.70 and whose dividend is expected to grow indefinitely at a 5.20% rate. What is the firm's expected dividend stream over the next 4 years? What is its current stock price? Assume a expected rate of return of 8.80%. a) What are the expected dividend yield, the capital gains yield, and the total return during the first year? b) Now assume that the stock is currently selling at...

1a. The last dividend Company X paid was $ 5 and the constant growth rate of...

1a. The last dividend Company X paid was $ 5 and the constant growth rate of dividends is 2%. The current price of this stock is $20 per share. What is the required rate of return (yield) on that stock? A 27.5% B 15% C 8% D 35% 1b. Your first investment is Stock A. 3 years ago you bought Stock A from $20 and sold it now at $25. Over the three years you received a cash dividend of...

12. Assume the BonBon Candy Company is a constant growth company whose last dividend was $3,00...

12. Assume the BonBon Candy Company is a constant growth company whose last dividend was $3,00 and whose dividend is expected to grow indefinitely at 6% rate. It normally discounts all cash flow at 10% . a. what is the firm’s expected dividend stream over the next three years ? b. what is the firm’s current stock price ? c. what is the stoch’s expected value one year from now ? d. what are the following : i. the...

The Ramirez Company's last dividend was $1.75. Its dividend growth rate is expected to be constant...

The Ramirez Company's last dividend was $1.75. Its dividend growth rate is expected to be constant at 24% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its required return (r) is 12%. What is the best estimate of the current stock price? $42.48 $41.98 $43.11 $41.82

Non-constant Growth Stock The last dividend paid by Company A was $2.20. Its growth rate is...

Non-constant Growth Stock The last dividend paid by Company A was $2.20. Its growth rate is expected to be 10 percent for three years, after which dividends are expected to grow at a rate of 6 percent forever. The company’s stockholders require a rate of return on equity of 11.5 percent. a. Draw a clear and accurate timeline of the expected cash flows. (The timeline should consist of time periods (t = 0, 1, 2, . . .), the cash...

Morgan Company's last dividend (D0) was $1.40. Its dividend growth rate is expected to be constant...

Morgan Company's last dividend (D0) was $1.40. Its dividend growth rate is expected to be constant at 24% for 2 years, after which dividends are expected to grow at a rate of 6% forever. If the company's required return is 12%, what is your estimate of its current stock price? Your answer should be between 18.40 and 78.16.

Orwell building supplies' last dividend was $1.75. Its dividend growth rate is expected to be constant...

Orwell building supplies' last dividend was $1.75. Its dividend growth rate is expected to be constant at 41.00% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its required return (rs) is 12%. What is the best estimate of the current stock price? Select the correct answer. a. $50.43 b. $52.79 c. $53.97 d. $51.61 e. $49.25

Assume a company X has a constant dividend growth rate of 4% per annum for perpetuity....

Assume a company X has a constant dividend growth rate of 4% per annum for perpetuity. This year the company has given a dividend of $5 per share. Further, the required rate of return for the company is 10% per annum. Then, what should be the purchase price for a share of company X?

A share currently sells for $14 a share. Its dividend is growing at a constant rate, and its dividend yield is 7 percent.

A share currently sells for $14 a share. Its dividend is growing at a constant rate, and its dividend yield is 7 percent. The required rate of return on the company’s share is expected to remain constant at 14 percent per year. What is the expected share price (to the nearest dollar) five years from now?

Question