Question

Synovec Corp. is experiencing rapid growth. Dividends are
expected to grow at 24 percent per year during the next three
years, 14 percent over the following year, and then 8 percent per
year, indefinitely. The required return on this stock is 10 percent
and the stock currently sells for $86 per share. What is the
projected dividend for the coming year? **(Do not round
intermediate calculations and round your answer to 2 decimal
places, e.g., 32.16.)**

Answer #1

Let x be the dividend paid next year. So, dividend paid for year 2 and 3 will be 1.24x and 1.24^2*x. for Year 4 will be 1.24^2*1.14*x and 1.24^2*1.14*1.08 in Year 5.

Using Dividend Discount Model (DDM), Price of this stock can be calculated using the formula: D1/(1+r)+D2/(1+r)^2+D3/(1+r)^3+D4/(1+r)^4+(D5/(r-g))/(1+r)^4; where D1 to D5 are dividends paid from Year 1 to Year 5, r is required rate of return and g is constant growth rate of dividend.

So, Price of the stock= 86= x/1.1+(1.24x)/1.1^2+(1.24^2*x)/1.1^3+(1.24^2*1.14*x)/1.1^4+((1.24^2*1.14*1.08*x)/(10%-8%))/1.1^4

86= 68.9367*x

x= $1.25

So, Projected dividend for coming year is $1.25

Synovec Corp. is experiencing rapid growth. Dividends are
expected to grow at 24 percent per year during the next three
years, 14 percent over the following year, and then 8 percent per
year, indefinitely. The required return on this stock is 10 percent
and the stock currently sells for $86 per share. What is the
projected dividend for the coming year? (

Synovec Corp. is experiencing rapid growth. Dividends are
expected to grow at 28 percent per year during the next three
years, 18 percent over the following year, and then 6 percent per
year, indefinitely. The required return on this stock is 11 percent
and the stock currently sells for $68 per share. What is the
projected dividend for the coming year? (Do not round intermediate
calculations and round your answer to 2 decimal places, e.g.,
32.16.)

synovec corp is experiencing rapid growth. dividends are
expected to grow at 25 percent per year during the next three
years, 17 percent over the following year and then 5 percent per
year, indefinitely. the required return on this stock is 11 percent
and the stock currently sells for 65$ per share. what is the
projected dividend for the coming year?

Momsen Corp. is experiencing rapid growth. Dividends are
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years, 16 percent over the following year, and then 5 percent per
year indefinitely. The required return on this stock is 12 percent,
and the stock currently sells for $66 per share. What is the
projected dividend for the coming year? (Do not round intermediate
calculations and round your answer to 2 decimal places, e.g.,
32.16.)

Mobray Corp. is experiencing rapid growth. Dividends are
expected to grow at 28 percent per year during the next three
years, 18 percent over the following year, and then 6 percent per
year indefinitely. The required return on this stock is 12 percent,
and the stock currently sells for $62 per share. What is the
projected dividend for the coming year? (Do not round
intermediate calculations and round your answer to 2 decimal
places, e.g., 32.16.)

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expected to grow at 28 percent per year during the next three
years, 18 percent over the following year, and then 5 percent per
year indefinitely. The required return on this stock is 10 percent,
and the stock currently sells for $98 per share. What is the
projected dividend for the coming year?

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expected to grow at 25 percent per year during the next three
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year indefinitely. The required return on this stock is 10 percent,
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DISCLAIMER: I have seen similar questions posted but I do not
understand them, can you please try to explain...

Navel County Choppers, Inc., is experiencing rapid growth. The
company expects dividends to grow at 18 percent per year for the
next 12 years before leveling off at 4 percent into perpetuity. The
required return on the company’s stock is 11 percent. If the
dividend per share just paid was $1.64, what is the stock price?
(Do not round intermediate calculations and round your answer to 2
decimal places, e.g., 32.16.)

Problem 8-18 Supernormal Growth [LO1]
Synovec Co. is growing quickly. Dividends are expected to grow
at a rate of 20 percent for the next three years, with the growth
rate falling off to a constant 5 percent thereafter. If the
required return is 14 percent, and the company just paid a dividend
of $2.50, what is the current share price? (Do not round
intermediate calculations and round your answer to 2 decimal
places, e.g., 32.16.)
Current Share Price = ?

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required return is 11 percent, and the company just paid a dividend
of $2.45, what is the current share price? (Do not round
intermediate calculations and round your answer to 2 decimal
places, e.g., 32.16.)

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