Question

A fast growth share has the first dividend (t=1) of $2.61. Dividends are then expected to grow at a rate of 10 percent p.a. for a further 3 years. It then will settle to a constant-growth rate of 2.1 percent. . If the required rate of return is 19 percent, what is the current price of the share? (to the nearest cent)

Answer #1

A fast growth share has the first dividend (t=1) of $2.35.
Dividends are then expected to grow at a rate of 8 percent p.a. for
a further 3 years. It then will settle to a constant-growth rate of
3.0 percent. . If the required rate of return is 14 percent, what
is the current price of the share? (to the nearest cent)
Select one:
a. $24.03
b. $53.84
c. $21.36
d. $26.44

A fast growth share has the first dividend (t=1) of $1.31.
Dividends are then expected to grow at a rate of 5 percent p.a. for
a further 3 years. It then will settle to a constant-growth rate of
3.4 percent. . If the required rate of return is 18 percent, what
is the current price of the share? (to the nearest cent)
Select one:
a. $9.30
b. $25.61
c. $8.97
d. $6.13

A company has just paid its first dividend of $3.71. Next year's
dividend is forecast to grow by 9 percent, followed by another 9
per cent growth in year two. From year three onwards dividends are
expected to grow by 2.2 percent per annum, indefinitely. Investors
require a rate of return of 16 percent p.a. for investments of this
type. The current price of the share is (round to nearest cent)

A company has just paid its first dividend of $3.03. Next year's
dividend is forecast to grow by 9 percent, followed by another 9
per cent growth in year two. From year three onwards dividends are
expected to grow by 2.5 percent per annum, indefinitely. Investors
require a rate of return of 14 percent p.a. for investments of this
type. The current price of the share is (round to nearest cent)

Revarop, Inc., is a fast-growth company that is expected to grow at
a rate of 23 percent for the next four years. It is then expected
to grow at a constant rate of 6 percent. Revarop's first dividend,
of $4.25, will be paid in Year 3. If the required rate of return is
17 percent, what is the current value of the stock if dividends are
expected to grow at the same rate as the company?
Please include steps on...

A company has just paid its first dividend of $2.46. Next year's
dividend is forecast to grow by 9 percent, followed by another 9
per cent growth in year two. From year three onwards dividends are
expected to grow by 2.3 percent per annum, indefinitely. Investors
require a rate of return of 14 percent p.a. for investments of this
type. The current price of the share is (round to nearest cent)
Select one:
a. $24.26
b. $22.02
c. $12.22
d....

A company has just paid its first dividend of $3.45. Next year's
dividend is forecast to grow by 5 percent, followed by another 5
per cent growth in year two. From year three onwards dividends are
expected to grow by 2.8 percent per annum, indefinitely. Investors
require a rate of return of 15 percent p.a. for investments of this
type. The current price of the share is (round to nearest cent)
Select one:
a. $30.26
b. $27.38
c. $13.84
d....

A company has just paid its first dividend of $2.05. Next year's
dividend is forecast to grow by 9 percent, followed by another 9
per cent growth in year two. From year three onwards dividends are
expected to grow by 3.0 percent per annum, indefinitely. Investors
require a rate of return of 15 percent p.a. for investments of this
type. The current price of the share is (round to nearest cent)
Select one: a. $19.59 b. $17.75 c. $9.53 d....

The OWB Company paid $2.1 of dividends this year. If its
dividends are expected to grow at a rate of 3 percent per year,
what is the expected dividend per share for OWB five years from
today?
The current price of ABC stock is $35 per share. If ABC’s
current dividend is $1.5 per share and investors ‘required rate of
return is 10 percent, what is the expected growth rate of dividends
for ABC. Use constant dividend growth model.
Consider...

Carla Vista, Inc., is a fast-growth company that is expected to
grow at a rate of 23 percent (per year) for the next four years. It
is then expected to grow at a constant rate of 6 percent. Carla
Vista’s first dividend, of $3.60, will be paid in year 3. If the
required rate of return is 20 percent, what is the current value of
the stock if dividends are expected to grow at the same rate as the
company?...

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