Question

a. You just purchased a share of SPCC for ​$100. You expect to receive a dividend...

a. You just purchased a share of SPCC for ​$100. You expect to receive a dividend of ​$5 in one year. If you expect the price after the dividend is paid to be ​$110​, what toal return will you have earned over the​ year? What was your dividend​ yield? Your capital gain​ rate? The total return you will have earned over the year is _____%. (Round to two decimal places)

b. NoGrowth Corporation currently pays a dividend of $0.42 per​ quarter, and it will continue to pay this dividend forever. What is the price per share of NoGrowth stock if the​ firm's equity cost of capital is 15.7%​? The stock price is $_____. (Round to the nearest cent)

c. Summit Systems will pay a dividend of $1.50 this year. If you expect​ Summit's dividend to grow by 6.0% per​ year, what is its price per share if the​ firm's equity cost of capital is 11.0%​? The price per share is $____. (Round to the nearest cent)

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

SHENCE STOCK PRICE IN PART C = $ 38

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
a. Assume that Social Security promises you $42,000 per year starting when you retire 45 years...
a. Assume that Social Security promises you $42,000 per year starting when you retire 45 years from today​ (the first $42,000 will get paid 45 years from​ now). If your discount rate is 4%​, compounded​ annually, and you plan to live for 15 years after retiring​ (so that you will receive a total of 16 payments including the first​ one), what is the value today of Social​ Security's promise? The value today of Social​ Security's promise is ​$____? b. Assume​...
NoGrowth Corporation currently pays a dividend of $0.48 per​ quarter, and it will continue to pay...
NoGrowth Corporation currently pays a dividend of $0.48 per​ quarter, and it will continue to pay this dividend forever. What is the price per share of NoGrowth stock if the​ firm's equity cost of capital is 11.9%​? The stock price is $
Summit Systems will pay a dividend of $1.43 this year. If you expect​ Summit's dividend to...
Summit Systems will pay a dividend of $1.43 this year. If you expect​ Summit's dividend to grow by 6.7% per​ year, what is its price per share if the​ firm's equity cost of capital is 10.5%​? Cooperton Mining just announced it will cut its dividend from $4.03 to $2.73 per share and use the extra funds to expand. Prior to the​ announcement, Cooperton's dividends were expected to grow at a 3.3% ​rate, and its share price was $49.63. With the...
NoGrowth Corporation currently pays a dividend of $ 0.51 per​ quarter, and it will continue to...
NoGrowth Corporation currently pays a dividend of $ 0.51 per​ quarter, and it will continue to pay this dividend forever. What is the price per share of NoGrowth stock if the​ firm's equity cost of capital is 11.7 %​?
A company just paid a dividend of $0.81 per share and you expect the dividend to...
A company just paid a dividend of $0.81 per share and you expect the dividend to grow at a constant rate of 4.1% per year indefinitely into the future. If the required rate of return is 12.4% per year, what would be a fair price for this stock today? (Answer to the nearest penny per share.)
Assume Gillette Corporation will pay an annual dividend of $0.63 one year from now. Analysts expect...
Assume Gillette Corporation will pay an annual dividend of $0.63 one year from now. Analysts expect this dividend to grow at 11.9% per year thereafter until the 66th year.​ Thereafter, growth will level off at 2.2% per year. According to the​ dividend-discount model, what is the value of a share of Gillette stock if the​ firm's equity cost of capital is 8.9%​? The value of​ Gillette's stock is ​$ ​(Round to the nearest​ cent.)
Assume Gillette Corporation will pay an annual dividend of $0.65 one year from now. Analysts expect...
Assume Gillette Corporation will pay an annual dividend of $0.65 one year from now. Analysts expect this dividend to grow at 12.1% per year thereafter until the 6th year.​ Thereafter, growth will level off at 2.3% per year. According to the​ dividend-discount model, what is the value of a share of Gillette stock if the​ firm's equity cost of capital is 7.5%​? The value of​ Gillette's stock is __________ ​(Round to the nearest​ cent.)
Summit Systems has an equity cost of capital of 11.5 %11.5%​, will pay a dividend of...
Summit Systems has an equity cost of capital of 11.5 %11.5%​, will pay a dividend of ​$1.501.50 in one​ year, and its dividends had been expected to grow by 6.5 %6.5% per year. You read in the paper that Summit Systems has revised its growth prospects and now expects its dividends to grow at a rate of 3.0 %3.0% per year forever. a. What is the drop in value of a share of Summit Systems stock based on this​ information?...
Summit Systems has an equity cost of capital of 11.5 %?, will pay a dividend of...
Summit Systems has an equity cost of capital of 11.5 %?, will pay a dividend of ?$1.75 in one? year, and its dividends had been expected to grow by 6.5 % per year. You read in the paper that Summit Systems has revised its growth prospects and now expects its dividends to grow at a rate of 3.5 % per year forever. a. What is the drop in value of a share of Summit Systems stock based on this? information?...
Suppose Acap Corporation will pay a dividend of $2.72 per share at the end of this...
Suppose Acap Corporation will pay a dividend of $2.72 per share at the end of this year and $3.07 per share next year. You expect Acap's stock price to be $50.49 in two years. Assume that Acap's equity cost of capital is 9.4%. a. What price would you be willing to pay for a share of Acap stock today, if you planned to hold the stock for two years? b. Suppose instead you plan to hold the stock for one...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT