Question

1. Verona Industries just paid a dividend of $2.5 per common share. you expect the dividend...

1. Verona Industries just paid a dividend of $2.5 per common share. you expect the dividend to grow at 14% per year for the next 2 years and then the dividend will grow at 4% for the foreseeable future. You estimate the appropriate discount rate is 9.80% per year. Using information you estimate the current price for Verona is closet to:

A: $52.25

B.$48.02

C:$61.99

2.

An advantage of the payback period method for accepting and rejecting capital projects is:

A. it is a break-even point

B. It uses all cash flows for the project

C.it is based on an arbitrary rule.

Please help with above Finance questions and explain, thanks.

Homework Answers

Answer #1

ANSWER IN THE IMAGE ((YELLOW HIGHLIGHTED). FEEL FREE TO ASK ANY DOUBTS. THUMBS UP PLEASE.

Q1.

Q2: Payback period: it is the amount of time required to recover the original cost of the project.

Ans: A. it is a break-even point.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Verona Industries just paid a dividend of $0.95. You expect the dividend to grow at 18%...
Verona Industries just paid a dividend of $0.95. You expect the dividend to grow at 18% for the next two years, and then the dividend will grow at 6.00% for the foreseeable future. You estimate the appropriate discount rate is 12.10%. Using this information you estimate the current price for Verona is closest to: A. $23.83. B. $21.50. C. $29.37.
Verona Industries just paid a dividend of $0.95. You expect the dividend to grow at 18%...
Verona Industries just paid a dividend of $0.95. You expect the dividend to grow at 18% for the next two years, and then the dividend will grow at 6.00% for the foreseeable future. You estimate the appropriate discount rate is 12.10%. Using this information you estimate the current price for Verona is closest to: A. $21.50. B. $29.37. C. $23.83.
Verona Industries just paid a dividend of $1.80. You expect the dividend to grow at 12%...
Verona Industries just paid a dividend of $1.80. You expect the dividend to grow at 12% for the next two years, and then the dividend will grow at 5% for the foreseeable future. You estimate the appropriate discount rate is 10.75%. Using this information you estimate the current price for Verona is closest to: A. $37.88. B. $50.06. C. $41.53.
Mack Industries just paid a dividend of $5 per share (D0 = $5). Analysts expect the...
Mack Industries just paid a dividend of $5 per share (D0 = $5). Analysts expect the company’s dividend to grow 7 percent this year (D1 = $5.35) and 5 percent next year.   After two years the dividend is expected to grow at a constant rate of 5 percent.  The required rate of return on the company’s stock is 15 percent.  What should be the company’s current stock price?
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.)
Mack Industries just paid $1.00 per share dividend (i.e., D0=$1.00). Analysts expect the company's dividend to...
Mack Industries just paid $1.00 per share dividend (i.e., D0=$1.00). Analysts expect the company's dividend to grow 20 percent this year (i.e., D1=1$1.20), and 15 percent in the following year. After two years the dividend is expected to grow at a constant rate of 5 percent. The required rate of return on the company's stock is 12 percent. What should be the current price of the company's stock? Show answer using excel.
IBM just paid a dividend of $1.2 per share. You expect IBM's dividend to grow at...
IBM just paid a dividend of $1.2 per share. You expect IBM's dividend to grow at a rate of 10% per year for the next three years, and then you expect constant dividend growth of 5% forever. Based on the risk of IBM stock, you require a return of 8%. Using the dividend discount model, what is the value of IBM stock?
Nachman Industries just paid a dividend of D0 = $3.75. Analysts expect the company's dividend to...
Nachman Industries just paid a dividend of D0 = $3.75. Analysts expect the company's dividend to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The required return on this low-risk stock is 9.00%. What is the best estimate of the stock's current market value?
Ralph Industries just paid a dividend of D0 = $1. 5. Analysts expect the company's dividend...
Ralph Industries just paid a dividend of D0 = $1. 5. Analysts expect the company's dividend to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The required return on this low-risk stock is 9%. What is the best estimate of the stock’s current market value? * a) $50.20 b) $50.98 c) $60.98 d) $45.80
Nachman Industries just paid a dividend of D0 = $2.50. Analysts expect the company's dividend to...
Nachman Industries just paid a dividend of D0 = $2.50. Analysts expect the company's dividend to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The required return on this low-risk stock is 9.00%. What is the best estimate of the stock’s current market value? Do not round intermediate calculations. Please show work