Question

ABC Inc. is a mature manufacturing firm. The company just paid dividends of $10.25 per share,...

ABC Inc. is a mature manufacturing firm. The company just paid dividends of $10.25 per share, but management expects to reduce dividends by 4 percent per year indefinitely. If you require a rate of return of 9.8 percent on this stock, what will you pay for a share today?

Math   Advanced-Math   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Please feel free to ask any query in the comment box and don't forget to rate if you like.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Antiques R Us is a mature manufacturing firm. The company just paid a dividend of $9.80,...
Antiques R Us is a mature manufacturing firm. The company just paid a dividend of $9.80, but management expects to reduce the payout by 4 percent per year indefinitely. If you require a return of 9.5 percent on this stock, what will you pay for a share today?
1) The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.48 per share on its stock....
1) The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.48 per share on its stock. The dividends are expected to grow at a constant rate of 7 percent per year indefinitely. Required: (a) If investors require a 13 percent return on The Jackson-Timberlake Wardrobe Co. stock, what is the current price? (b) What will the price be in 8 years? 2) Antiques R Us is a mature manufacturing firm. The company just paid a $5 dividend, but management expects...
Madison Tour, Inc., just paid a dividend of $3.15 per share on its stock. The dividends...
Madison Tour, Inc., just paid a dividend of $3.15 per share on its stock. The dividends are expected to grow at a constant rate of 6 percent per year, indefinitely. Assume investors require a return of 11 percent on this stock. What will the price be in 3 years?
ABC Inc., will pay no dividends over the next 13 years because the firm needs to...
ABC Inc., will pay no dividends over the next 13 years because the firm needs to retain its earnings for growth purposes. The company will pay an $4 per share dividend in 14 years and will increase the dividend by 4 percent per year thereafter. If the required return on this stock is 9 percent, what is the current (t=0) share price? ABC Inc. just paid a dividend of $1.75 per share. The company will increase its dividend by 28...
a. ABC Company has just paid a dividend of $1.00 per share. Dividends are paid annually....
a. ABC Company has just paid a dividend of $1.00 per share. Dividends are paid annually. Analysts estimate that dividends per share will grow at a rate of 20% for the next 2 years, at 15% for the subsequent 3 years, and at 3% thereafter. If the shareholders’ required rate of return is 12% per year, then what is the price of the stock today? What will be the ex-dividend price at the end of the first year? What will...
CEPS Group just paid an annual dividend of OMR 1.45 per share. Today, the company announced...
CEPS Group just paid an annual dividend of OMR 1.45 per share. Today, the company announced that future dividends will be increasing by 3.25 percent annually. If you require a 15 percent rate of return, how much are you willing to pay to purchase one share of this stock today?
1. XYZ Inc. has paid annual dividends of $.48, $0.60, and $0.62 a share over the...
1. XYZ Inc. has paid annual dividends of $.48, $0.60, and $0.62 a share over the past three years, respectively. The company plans to maintain a constant dividend in the future. If the required rate of return is 14% for such stock with no growth potential, how much is the price per share you are willing to pay? Answer: _____ ( round to 2 decimal places) 2. ABC pays a constant dividend of $0.75 a share. The company announced today...
The Jackson Company has just paid a dividend of $3.00 per share on its common stock,...
The Jackson Company has just paid a dividend of $3.00 per share on its common stock, and it expects this dividend to grow by 10 percent per year, indefinitely. The firm has a beta of 1.50; the risk-free rate is 10 percent; and the expected return on the market is 14 percent. The firm's investment bankers believe that new issues of common stock would have a flotation cost equal to 5 percent of the current market price. How much should...
A7X Corp. just paid a dividend of $1.50 per share. The dividends are expected to grow...
A7X Corp. just paid a dividend of $1.50 per share. The dividends are expected to grow at 40 percent for the next 10 years and then level off to a growth rate of 6 percent indefinitely.     If the required return is 15 percent, what is the price of the stock today?
A7X Corp. just paid a dividend of $1.55 per share. The dividends are expected to grow...
A7X Corp. just paid a dividend of $1.55 per share. The dividends are expected to grow at 30 percent for the next 7 years and then level off to a growth rate of 8 percent indefinitely.     If the required return is 14 percent, what is the price of the stock today?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT