Sandhill Corp. is a fast-growing company whose management expects it to grow at a rate of...

Sandhill Corp. is a fast-growing company whose management expects it to grow at a rate of 29 percent over the next two years and then to slow to a growth rate of 12 percent for the following three years. If the last dividend paid by the company was $2.15.

What is the dividend for the 1st year? (Round answer to 3 decimal places, e.g. 15.250.)

What is the dividend for the 2nd year? (Round answer to 3 decimal places, e.g. 15.250.)

What is the dividend for the 3rd year? (Round answer to 3 decimal places, e.g. 15.250.)

What is the dividend for the 4th year? (Round answer to 3 decimal places, e.g. 15.250.)

What is the dividend for the 5th year? (Round answer to 3 decimal places, e.g. 15.250.)

Compute the present value of these dividends if the required rate of return is 14 percent. (Round intermediate calculations and final answer to 2 decimal places, e.g. 15.25.)

Expert Solution

A	B	C	D	E	F	G	H
Year	Dividend	Growth rate	Growth rate	Dividend(D*E)	Calcualtions	Discounting factor@14%	Presnet value of Dividend(E*G)
0	D0	-	-	$ 2.150	-
1	D1	29%	1.29	$ 2.774	(2.15*1.29)	0.877	$ 2.433
2	D2	29%	1.29	$ 3.578	(2.774*1.29)	0.769	$ 2.753
3	D3	12%	1.12	$ 4.007	(3.578*1.12)	0.675	$ 2.705
4	D4	12%	1.12	$ 4.488	(4.007*1.12)	0.592	$ 2.657
5	D5	12%	1.12	$ 5.027	(4.488*1.12)	0.519	$ 2.611
							$ 13.159

dividend for the 1st year	$ 2.774
dividend for the 2nd year	$ 3.578
dividend for the 3rd year	$ 4.007
dividend for the 4th year	$ 4.488
dividend for the 5th year	$ 5.027

Present Value of dividends at required rate	$ 13.159

jeff jeffy answered 1 year ago

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 $ LINK TO TEXT What is the...

Blossom Corp. is a fast-growing company whose management expects it to grow at a rate of...

Blossom Corp. is a fast-growing company whose management expects it to grow at a rate of 22 percent over the next two years and then to slow to a growth rate of 16 percent for the following three years. If the last dividend paid by the company was $2.15. What is the dividend for the 1st year? (Round answer to 3 decimal places, e.g. 15.250.) D1 $enter a dollar amount of the dividend for the first year rounded to 3...

Ivanhoe Corp. is a fast-growing company whose management expects it to grow at a rate of...

Ivanhoe Corp. is a fast-growing company whose management expects it to grow at a rate of 23 percent over the next two years and then to slow to a growth rate of 17 percent for the following three years. If the last dividend paid by the company was $2.15. What is the dividend for the 1st year? (Round answer to 3 decimal places, e.g. 15.250.) D1: $______ What is the dividend for the 2nd year? (Round answer to 3 decimal...

Nerus' Catering is growing at a very fast rate. As a result, the company expects to...

Nerus' Catering is growing at a very fast rate. As a result, the company expects to increase its dividend to $0.42, $0.92, and $1.32 over the next three years, respectively. After that, the dividend is projected to increase by 6.5 percent annually. The last annual dividend the firm paid was $0.24 a share. What is the current value of this stock if the required return is 10.3 percent? The common stock of Major Carter Naquadah Generators is valued at $8...

Best Foods Corp. expects earnings and dividends to grow at a rate of 25% for the...

Best Foods Corp. expects earnings and dividends to grow at a rate of 25% for the next 4 years. After that period, 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?

Biarritz Corp. is growing quickly. Dividends are expected to grow at a rate of 25 percent...

Biarritz Corp. is growing quickly. Dividends are expected to grow at a rate of 25 percent for the next three years, with the growth rate falling off to a constant 4.5 percent thereafter. If the required return is 10.5 percent and the company just paid a dividend of $2.85, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Sandhill, Inc., management expects the company to earn cash flows of $11,500, $16,000, $19,000, and $19,700...

Sandhill, Inc., management expects the company to earn cash flows of $11,500, $16,000, $19,000, and $19,700 over the next four years. If the company uses an 10 percent discount rate, what is the future value of these cash flows at the end of year 4?

Sandhill Corp. paid a dividend of $2.24 yesterday. The company’s dividend is expected to grow at...

Sandhill Corp. paid a dividend of $2.24 yesterday. The company’s dividend is expected to grow at a steady rate of 5 percent for the foreseeable future. If investors in stocks of companies like Sandhill require a rate of return of 17 percent, what should be the market price of Sandhill stock? (Round dividend to 3 decimal places, e.g. 3.756 and round final answer to 2 decimal places, e.g. 15.25.) Market price

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

Charlie’s Computer Corporation (CCC) is growing rapidly and expects to continue to grow at 20% per...

Charlie’s Computer Corporation (CCC) is growing rapidly and expects to continue to grow at 20% per year for the next two years, 10% for the year after and then stabilize to 6% annual growth. CCC doesn’t currently pay dividends but expects to pay a $2 per share dividend one year from today. If the appropriate discount rate is 12%, then what is the value of a share of CCC stock?

Question