Stoneworks, Inc., has an odd dividend policy. The company has just paid a dividend of $15...

Stoneworks, Inc., has an odd dividend policy. The company has just paid a dividend of $15 per share and has announced that it will increase the dividend by $3 per share for each of the next five years, and then never pay another dividend. If you require a return of 11 percent on the company’s stock, how much will you pay for a share today?

Expert Solution

jeff jeffy answered 1 year ago

Maloney, Inc., has an odd dividend policy. The company has just paid a dividend of $4...

Maloney, Inc., has an odd dividend policy. The company has just paid a dividend of $4 per share and has announced that it will increase the dividend by $6 per share for each of the next five years, and then never pay another dividend. If you require a return of 14 percent on the company’s stock, how much will you pay for a share today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

JustKidding Corporation has an odd dividend policy. The company has just paid a dividend of $9...

JustKidding Corporation has an odd dividend policy. The company has just paid a dividend of $9 per share and has announced that it will increase the dividend by $4 per share for each of the next five years, and then never pay another dividend. If you require a return of 10 percent on the company’s stock, how much will you pay for a share today?

SmartDeal Inc. has just paid dividend of $5. The dividend is expected to increase at 16%...

SmartDeal Inc. has just paid dividend of $5. The dividend is expected to increase at 16% for the first 15 years, -6% for the next 10 years and then 2% forever. The required rate of return is 12% for the first 8 years and 20% thereafter. Find its share price today. (Please show your work, and do NOT use Excel to solve)

Winston Inc. has just paid a dividend of $4.10. An analyst forecasts annual dividend growth of...

Winston Inc. has just paid a dividend of $4.10. An analyst forecasts annual dividend growth of 9 percent for the next five years; then dividends will decrease by 1 percent per year in perpetuity. The required return is 12 percent (effective annual return, EAR). What is the current value per share according to the analyst? (Round present value factor calculations to 5 decimal places, e.g. 1.54667 and other intermediate calculations to 3 decimal places, e.g.15.612. Round final answer to 2...

Windsor Inc. has just paid a dividend of $4.10. An analyst forecasts annual dividend growth of...

Windsor Inc. has just paid a dividend of $4.10. An analyst forecasts annual dividend growth of 9 percent for the next five years; then dividends will decrease by 1 percent per year in perpetuity. The required return is 12 percent (effective annual return, EAR). What is the current value per share according to the analyst? (Round present value factor calculations to 5 decimal places, e.g. 1.54667 and other intermediate calculations to 3 decimal places, e.g.15.612. Round final answer to 2...

Monster Inc just paid a dividend of $1.33. Its stock has a dividend growth rate of...

Monster Inc just paid a dividend of $1.33. Its stock has a dividend growth rate of 7.6% and a required return of 12.21%. What is the current stock price if we anticipate dividends stopping in 10 years?

4) A company XYZ has a beta of 1.3. The company just paid a dividend of...

4) A company XYZ has a beta of 1.3. The company just paid a dividend of $0.95, and the dividends are set to grow at the rate of 4.5% a year. The expected return on the market index is 11% and T bills are yielding 4.3% The recent stock price is $64. Calculate the cost of equity using the dividend discount model method. Calculate the cost of equity using the SML method. Why are the answers different in parts (a)...

A. Company XYZ has just paid a dividend of $3. As XYZ is a young company...

A. Company XYZ has just paid a dividend of $3. As XYZ is a young company and successful, it is estimated that they will grow at rate of 20% for 5 years and then at 3% in perpetuity. The company faces a required return on equity of 7%. What is the current price of the company’s stock using the DDM model? Use excel for all calculations

Bozo Inc. just paid an annual dividend of $1.50 per share, and the required return for this stock is 15%.

Bozo Inc. just paid an annual dividend of $1.50 per share, and the required return for this stock is 15%. A. Calculate Bozo's stock value with the following assumptions A. No dividend growth B. A constant growth of 5% C. A constant growth of 10% D. A constant growth of 5% and a requiredi return of 10%

Cavalier Custom Design Inc. just paid a dividend of $0.73. Its stock has a dividend growth...

Cavalier Custom Design Inc. just paid a dividend of $0.73. Its stock has a dividend growth rate of 5.62% and a required return of10.21%. What is the current stock price if we anticipate dividends stopping in 20 years? Please show the work, excel preferred.

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