Apple has just paid a quarterly dividend of $3.72. Dividends are expected to grow by 10%...

Apple has just paid a quarterly dividend of $3.72. Dividends are expected to grow by 10% for the next 4 quarters, and then grow by 1% thereafter. Apple has a required quarterly return of 5%.

What is the value of the expected dividends in four quarters?

What is the horizon value in the fourth quarter (P4P4)?

What is the value of the stock now?

Expert Solution

jeff jeffy answered 1 year ago

The Apple just paid a $0.8 quarterly dividend. The dividends are expected to grow at 20%...

The Apple just paid a $0.8 quarterly dividend. The dividends are expected to grow at 20% per year for the next 3 years. After that, the growth rate is expected to go down to the industry average of 8% per year and stay at this level forever. The required rate of return on Apple is 15% per annum. 1.Draw the time line, showing dividends of Apple. 2.Find the price of Apple stock. 3.Find the value of its growth opportunities (PVGO)....

Apple has just paid an annual dividend of $3.5. Dividends are expected to grow by 22%...

Apple has just paid an annual dividend of $3.5. Dividends are expected to grow by 22% per year for the next 4 years, and then grow by 14% thereafter. Apple has an annual required return of 31%. a) What is the value of the expected dividends in four years? b) What is the intrinsic value in the fourth year (V4)? c) What is the value of the stock now (V0)?

The ABC COmpany just paid a $0.8 quarterly dividend. The dividends are expected to grow at...

The ABC COmpany just paid a $0.8 quarterly dividend. The dividends are expected to grow at 20% per year for the next 3 years. After that, the growth rate is expected to go down to the industry average of 8% per year and stay at this level forever. The required rate of return on ABC is 15% per annum. 1)Draw the time line, showing dividends of ABC. 2)Find the price of ABC stock. 3)Find the value of its growth opportunities...

Apple, Inc. just paid a dividend of $2.28 a share. Dividends are expected to grow at...

Apple, Inc. just paid a dividend of $2.28 a share. Dividends are expected to grow at a rate of 12% per year for the next three years and then at a rate of 3.5% thereafter. If your required rate of return is 9%, what is the most that you should be willing to pay for a share of Apple stock today?

AT&T just paid a $5 dividend, dividends are expected to grow at a 10% rate for...

AT&T just paid a $5 dividend, dividends are expected to grow at a 10% rate for the next three years and at a 5% rate after that. What is the value of the stock if investors require a 13% return to purchase the stock?

1. A stock just paid a dividend of $0.75. This quarterly dividend is expected to grow...

1. A stock just paid a dividend of $0.75. This quarterly dividend is expected to grow at a rate of 4% for the next 10 years, after which it will grow at a rate of -2% in perpetuity. What is the price of the stock if the required return is 12% (all rates are APR with quarterly compounding)? 2. A firm has a P/E ratio of 18.5, a payout ratio of 50%, and a required return of 12% per annum....

A stock just paid a dividend this morning of $1.30. Dividends are expected to grow at...

A stock just paid a dividend this morning of $1.30. Dividends are expected to grow at 14.00% for the next two years. After year 2, dividends are expected to grow at 8.06 % for the following three years. At that point, dividends are expected to grow at a rate of 6.00% forever. If investors require a return of 15.00% to own the stock, what is its intrinsic value?

Walmart has just paid an annual dividend of $3.71. Dividends are expected to grow by 7%...

Walmart has just paid an annual dividend of $3.71. Dividends are expected to grow by 7% for the next 4 years, and then grow by 4% thereafter. Walmart has a required return of 11%. (Note the wording of this problem. Typically, when a problem says "expected to grow for the next X years", they mean that the the cashflow will grow constantly up to the end of year X, then the cashflow at year X will grow at some other...

ABC, Inc. just paid a dividend of $1.2. The dividends are expected to grow at 5.09%...

ABC, Inc. just paid a dividend of $1.2. The dividends are expected to grow at 5.09% each year forever. The required rate of return on the stock is 24.79%. What is today's price of the stock? Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box.

Suppose the company just paid dividend of $1. The dividends are expected to grow at 25%...

Suppose the company just paid dividend of $1. The dividends are expected to grow at 25% in Year 1 and 20% in Year 2, and 15% in Year 3. After that, the dividends will grow at a constant rate of 5% forever. If the required rate of return is 10%, compute today's price of the stock.

Question