Question

Consider four different stocks, all of which have a required return of 18.25 percent and a most recent dividend of $3.60 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 –5 percent per year, respectively. Stock Z is a growth stock that will increase its dividend by 20.25 percent for the next two years and then maintain a constant 12 percent growth rate, thereafter.

What is the dividend yield for each of these four stocks?
**(Do not round intermediate calculations and enter your
answers as a percent rounded to 2 decimal places, e.g.,
32.16.)**

What is the expected capital gains yield for each of these four
stocks? **(A negative answer should be indicated by a minus
sign. Leave no cells blank - be certain to enter "0" wherever
required. Do not round intermediate calculations and enter your
answers as a percent rounded to 2 decimal places, e.g.,
32.16.)
**

Answer #1

The price is given by P = D0*(1+g)/(r-g)

Consider four different stocks, all of which have a required
return of 16 percent and a most recent dividend of $2.80 per share.
Stocks W, X, and Y are expected to maintain constant growth rates
in dividends for the foreseeable future of 8 percent, 0 percent,
and −5 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,...

Consider four different stocks, all of which have a required
return of 20 percent and a most recent dividend of $5.10 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 –5 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 9 percent growth rate...

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...

Consider the
following information about three stocks:
Rate of Return If State Occurs
State of
Probability of
Economy
State of Economy
Stock A
Stock B
Stock C
Boom
.30
.36
.48
.60
Normal
.40
.15
.13
.11
Bust
.30
.06
−.28
−.48
a-1.
If your portfolio is invested 25 percent each in A and B and 50
percent in C, what is the portfolio expected return? (Do
not round intermediate calculations and enter your answer as a
percent...

A.
A stock is selling for $12.80 a share given a market return of
18.5 percent and a capital gains yield of 6.8 percent. What was the
amount of the last annual dividend that was paid?
B.
A stock is selling for $50 a share. There are 215,000 shares
outstanding and the net income of the firm is $567,000. What is the
P/E ratio?
C.
Tell Me Why Co. is expected to maintain a constant 3.8 percent
growth rate in...

consider the following information about three stocks:
Rate of Return If State Occurs
State of
Probability of
Economy
State of Economy
Stock A
Stock B
Stock C
Boom
.25
.30
.42
.54
Normal
.45
.12
.10
.08
Bust
.30
.03
−.24
−.44
a-1.
If your portfolio is invested 45 percent each in A and B and 10
percent in C, what is the portfolio expected return? (Do
not round intermediate calculations and enter your answer as a
percent...

Consider the following information about three stocks: Rate of
Return If State Occurs State of Probability of Economy State of
Economy Stock A Stock B Stock C Boom .20 .24 .36 .55 Normal .55 .17
.13 .09 Bust .25 .00 −.28 −.45 a-1 If your portfolio is invested 40
percent each in A and B and 20 percent in C, what is the portfolio
expected return? (Do not round intermediate calculations. Enter
your answer as a percent rounded to 2...

Consider the following information on three
stocks:
Rate of Return If State OccursState of
EconomyProbability of State
of EconomyStock AStock BStock CBoom
.20 .20 .32 .54 Normal
.45 .18 .16 .14 Bust
.35 .02 −.34 −.42
a-1 If your portfolio is invested 40 percent each in A and B
and 20 percent in C, what is the portfolio expected return? (Do
not round intermediate calculations. Enter your answer as a percent
rounded to 2 decimal places, e.g., 32.16.)
Portfolio expected return
%
a-2 What is the variance? (Do...

Consider the following information about three stocks:
State of Probability of Economy State of Economy Stock A Stock B
Stock C Boom .25 .34 .46 .58 Normal .50 .14 .12 .10 Bust .25 .05
−.26 −.46 a-1. If your portfolio is invested 20 percent each in A
and B and 60 percent in C, what is the portfolio expected return?
(Do not round intermediate calculations and enter your answer as a
percent rounded to 2 decimal places, e.g., 32.16.) a-2....

Consider the following information:
Rate of Return If State Occurs
State of Economy
Probability of State of Economy
Stock A
Stock B
Recession
.18
.07
−.18
Normal
.55
.10
.11
Boom
.27
.15
.28
Calculate the expected return for the two stocks. (Do not
round intermediate calculations. Enter your answers as a percent
rounded to 2 decimal places, e.g., 32.16.)
Expected return
Stock A
%
Stock B
%
Calculate the standard deviation for the two stocks. (Do
not round intermediate...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 1 minute ago

asked 1 minute ago

asked 1 minute ago

asked 3 minutes ago

asked 10 minutes ago

asked 11 minutes ago

asked 29 minutes ago

asked 40 minutes ago

asked 41 minutes ago

asked 58 minutes ago

asked 59 minutes ago

asked 1 hour ago