Question

A stocks last dividend was $1.84 per dhare and the dividends are expected to grow 32%...

A stocks last dividend was $1.84 per dhare and the dividends are expected to grow 32% per year for three years. After, the dividends are expected to grow at a constant rate of 6.5% Per year. if investors require a return of 13.4% per year to hold a stock what is its intrinsic value per share?

Homework Answers

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
Dividends discount model: The MBS Corporation’s dividends per share are expected to grow indefinitely by 5%...
Dividends discount model: The MBS Corporation’s dividends per share are expected to grow indefinitely by 5% per year. DDa.       If this year-end dividend is $8 and the market capitalization rate is 10% per year, what must the current stock price be according to the DDM (Dividends Discounting Model)? DDb.      If the expected earnings per share are 12$, what is the implied value of the ROE on future investment opportunities? DDc.       How much is the market paying per share for growth opportunities (i.e., for...
Madison Tour, Inc., just paid a dividend of $3.15 per share on its stock. The dividends...
Madison Tour, Inc., just paid a dividend of $3.15 per share on its stock. The dividends are expected to grow at a constant rate of 6 percent per year, indefinitely. Assume investors require a return of 11 percent on this stock. What will the price be in 3 years?
The OWB Company paid $2.1 of dividends this year. If its dividends are expected to grow...
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...
Bronze Company Ltd last paid a dividend of $0.20 per share. This dividend is expected to...
Bronze Company Ltd last paid a dividend of $0.20 per share. This dividend is expected to grow at 15% per annum for three years, then at 10% per annum for the next three years, after which it is expected to grow at a 5% rate forever. REQUIRED: (i) Calculate the price you would pay for the share if your required rate of return is 10%? (ii) Calculate the price you would pay for the share if you expected to hold...
1. Sky High Co. just paid a dividend of $2.0 per share on its stock. The...
1. Sky High Co. just paid a dividend of $2.0 per share on its stock. The dividends are expected to grow at a constant rate of 2 percent per year indefinitely. If investors require an 8.6 percent return on Sky High Co. stock, the current price is $ _________ . Round it to two decimal places 2. Sky High Co. just paid a dividend of $4.6 per share on its stock (D0). The dividends are expected to grow at a...
A company just paid a dividend of $3.50 per share on its stock. The dividends are...
A company just paid a dividend of $3.50 per share on its stock. The dividends are expected to grow at a constant rate of 3.6% per year. (i) If the required rate of return is 11.6%, what is current price? (ii) What will be the price of this stock in five years? (iii) You own 10 stocks of the company., and were planning to hold these stocks for 5 years before you sell. Suppose your friend is willing to buy...
Angus Corporation paid a dividend of $1.25 per share last year. Dividends are expected to grow...
Angus Corporation paid a dividend of $1.25 per share last year. Dividends are expected to grow at a rate of 5% per year into the foreseeable future. 1) Assume the current Treasury security rate is 4% and the average S&P 500 market return is 8%. ValueLine is reporting a beta of 1.35 for Angus. How much do you think a share of Angus stock is worth? 2) If Angus’ shares are currently selling for $35, what is the expected rate...
Question 1/ Firm A has just paid a dividend of $1.5 per share. The dividends are...
Question 1/ Firm A has just paid a dividend of $1.5 per share. The dividends are expected to grow during year 1 by 14.5% and during year 2 by 11.9% and during year 3 by 8.5% and during year 4 by 6.5%. Starting from year 4 the dividends are expected to grow constantly by 4.5% forever. The required rate of return on the stocks is 12%. a/ Compute the intrinsic value of the stock now? (Show your steps) b/ Compute...
Dvorak Enterprises is expected to pay a stable dividend of $7 per share per year for...
Dvorak Enterprises is expected to pay a stable dividend of $7 per share per year for the next 8 years. After that, investors anticipate that the dividends will grow at a constant rate of 3 percent per year indefinitely. If the required rate of return on this stock is 12 percent, what is the fair market value of a share of Dvorak?
MasksAreUs Inc. just paid a dividend of $3 per share. Future dividends are expected to grow...
MasksAreUs Inc. just paid a dividend of $3 per share. Future dividends are expected to grow at a constant rate of 5% per year. What is the value of the stock if the required return is 8%?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT
Active Questions
  • Which document is necessary in establishing outsourcing relationships with an application service provider (ASP)? Service Level...
    asked 8 minutes ago
  • In order to conduct a hypothesis test for the population proportion, you sample 450 observations that...
    asked 14 minutes ago
  • Doctor’s Order: Vancomycin 500mg tab i po q12h X 7 days Available: Vancomycin 500mg tablets What...
    asked 27 minutes ago
  • Calculate the ΔG∘rxn for the reaction using the following information. 4HNO3(g)+5N2H4(l)→7N2(g)+12H2O(l) ΔG∘f(HNO3(g)) = -73.5 kJ/mol; ΔG∘f(N2H4(l))...
    asked 28 minutes ago
  • Question 03: Saturn Shoes (Pvt.) Ltd manufacture multi-style fashion boots for the residents of Missouri. Leather...
    asked 30 minutes ago
  • A highway with a design speed of 100 km/hr is designed with a sag curve connecting...
    asked 42 minutes ago
  • Shift Registers can be used for serial/parallel interface applications. True or false?
    asked 1 hour ago
  • Scenario 1: To describe the instructors’ experience, the researcher records the year in which each instructor...
    asked 1 hour ago
  • develop a flowchart or pseudocode to check the prime numbers 1- below 100 what to do...
    asked 1 hour ago
  • Which of the following statements are true? I. The sampling distribution of ¯xx¯ has standard deviation...
    asked 1 hour ago
  • Which of the following methods of reporting cash flows provided by operating activities does the Financial...
    asked 1 hour ago
  • SITUATION 2: EFFECTIVE STRESS An engineer investigates a granular soil deposit, 4 meters thick, overlaying a...
    asked 1 hour ago