Question
In: Finance
Suppose a company’s expected dividends are $1.80, $2.79, and $3.14 for the next three years and...
Suppose a company’s expected dividends are $1.80, $2.79, and $3.14 for the next three years and are expected to grow at a constant rate of 1.82% per year thereafter. What should the current value of the stock if the required rate of return is 5.66%? Round your answer to 2 decimal places. (For example 6.798 = 6.80)
Solutions
jeff jeffy answered 1 year agoRelated Solutions
A firm is expected to pay dividends by 20% in year 1, 15% for the next three consecutive years, and then the dividends will increase by 5% forever.
A firm is expected to pay dividends by 20% in year 1, 15% for the
next three consecutive years, and then the dividends will increase
by 5% forever. calculate the value of the stock today. the most
recently paid dividend was $2 and the required rate of return is
12%.a) 47.38b) 74.39c) 43.70d) 34.69e) 28.69
If Yumms Inc. is expected to pay dividends of $3.93 for the next seven years, and...
If Yumms Inc. is expected to pay dividends of $3.93 for the next
seven years, and then after that the dividends are expected to grow
at 1.8% thereafter. What would you be willing to pay for a share of
stock if the required return is 3.8 percent?
If the risk premium for large company stocks is currently 4%,
and the T-Bill rate is 2.3%, then what is the current large company
stock return?
a) ABC Ltd is not expected to pay any dividends for the next 3 years. Then...
a) ABC Ltd is not expected to pay any dividends for the next 3
years. Then the expected dividend is $0.60 per share, which will
continue to grow at a constant rate of 25% per annum for another 3
years. After that, the dividend will grow indefinitely at 4% per
annum. If the rate of return is 11% per annum, what is the current
value of a share in ABC Ltd?
b) If the discount rate is 8%, what is...
a) ABC Ltd is not expected to pay any dividends for the next 3 years. Then...
a) ABC Ltd is not expected to pay any dividends for the next 3
years. Then the expected dividend is $0.70 per share, which will
continue to grow at a constant rate of 25% per annum for another 3
years. After that, the dividend will grow indefinitely at 4% per
annum. If the rate of return is 10% per annum, what is the current
value of a share in ABC Ltd?
b) If the discount rate is 8%, what is...
a) ABC Ltd is not expected to pay any dividends for the next 3 years. Then...
a) ABC Ltd is not expected to pay any dividends for the next 3
years. Then the expected dividend is $0.70 per share, which will
continue to grow at a constant rate of 25% per annum for another 3
years. After that, the dividend will grow indefinitely at 4% per
annum. If the rate of return is 10% per annum, what is the current
value of a share in ABC Ltd?
b) If the discount rate is 8%, what is...
a) ABC Ltd is not expected to pay any dividends for the next 3 years. Then...
a) ABC Ltd is not expected to pay any dividends for the next 3
years. Then the expected dividend is $0.70 per share, which will
continue to grow at a constant rate of 25% per annum for another 3
years. After that, the dividend will grow indefinitely at 4% per
annum. If the rate of return is 10% per annum, what is the current
value of a share in ABC Ltd?
b) If the discount rate is 8%, what is...
ABC Ltd is not expected to pay any dividends for the next 3 years. Then the...
ABC Ltd is not expected to pay any dividends for the next 3
years. Then the expected dividend is $0.70 per share, which will
continue to grow at a constant rate of 25% per annum for another 3
years. After that, the dividend will grow indefinitely at 4% per
annum.
a) If the rate of return is 10% per annum, what is the current
value of a share in ABC Ltd?
b) If the discount rate is 8%, what is...
A firm is not expected to pay a dividend for the next three years. If the...
A firm is not expected to pay a dividend for the next three
years. If the expected share price of the firm in three years in
$29 and investors require a 11% rate of return, what is the
expected share price today?
A firm is not expected to pay a dividend for the next three years. If the...
A firm is not expected to pay a dividend for the next three
years. If the expected share price of the firm in three years is
$48 and investors require a 14% rate of return, what is the
expected share price today?
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.
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