Question

The last dividend of a company is $2.25. The required rate of return is 10.75% and expected constant growth rate is 3.50%. What is the expected stock price, dividend, capital gains yield and dividend yield for the next three years? If you know a company's required rate of return is 11.50% and its expected constant growth rate is 4.50%, what is the expected dividend yield?

Answer #1

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A company is trying to estimate its cost of equity. The risk
free rate of return is 4.75% while the required rate of return is
9.75%. The company's beta is 1.2. The current stock price is $45.00
and the last dividend paid was $2.25; the expected constant growth
rate is 5.00%.
What is the estimated cost of equity using the Capital Asset
Pricing Model?
What is the estimated cost of equity using the Discounted Cash
Flow approach?
Why do the...

The
P. Born Company's last dividend was $1.50. The dividend growth rate
is expected to be constant at 20% for 3 years, after which
dividends are expected to grow at a rate of 6% forever. If Born's
required return (rs) is 13%, what is the company's current stock
price?

1. Stock Values
Courageous, Inc. just paid a dividend of $1.80per share on its
stock. The dividends are expected to grow at a constant rate of 3
percent per year, indefinitely. If investors require a 12 percent
return on Courageous stock, what is the current price? What will
the price be in 3 years? In 15 years?
PART A:
Current Price: $____________.
PART B:
Price in Three Years: $____________.
PART C:
Price in Fifteen Years: $____________.
#4 Stock Values
The...

JB Company's last dividend was $2.00. The dividend growth rate
is expected to be constant at 25% for 3 years, after which
dividends are expected to grow at a rate of 7% forever. Tapley's
required return (rs) is 10%. What is Tapley's current stock
price?

Ackert Company's last dividend was $1.55. The dividend growth
rate is expected to be constant at 1.5% for 2 years, after which
dividends are expected to grow at a rate of 8.0% forever. The
firm's required return (rs) is 12.0%. What is the best
estimate of the current stock price?

Ackert Company's last dividend was $0.50. The dividend growth
rate is expected to be constant at 1.5% for 2 years, after which
dividends are expected to grow at a rate of 8.0% forever. The
firm's required return (r) is 12.0%. What is the best estimate of
the current stock price?

ABC Company's last dividend was $0.7. The dividend growth rate
is expected to be constant at 7% for 4 years, after which dividends
are expected to grow at a rate of 4% forever. The firm's required
return (rs) is 15%. What is its current stock price (i.e. solve for
Po)?

ABC Company's last dividend was $3.5. The dividend growth rate
is expected to be constant at 6% for 4 years, after which dividends
are expected to grow at a rate of 4% forever. The firm's required
return (rs) is 9%. What is its current stock price (i.e. solve for
Po)?

Consider four different stocks, all of which have a
required return of 14 percent and a most recent dividend of 3.50
per share. Stocks W, X, and Y are expected to maintain constant
growth rates in dividends for the foreseeable future of 10 percent,
0 percent, and -6 percent per year, respectively. Stock Z is a
growth stock that will increase its dividend by 20 percent for the
next two years and then maintain a constant 12 percent growth rate...

**Please show calculations for this problem**
1. Calculate today’s stock price for PEG if last period’s
dividend was $1.48 and its dividend growth forever is expected to
be 6.0% (assuming a required rate of return of 9%)?
- Using the above assumptions, how would you partition PEG’s
required rate of return…in terms of its dividend yield and capital
gains growth rate? Please compute.
- If PEG’s dividend was expected to grow at 18% for the next 2
years…and then return...

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