Question

A7X Corp. just paid a dividend of $1.50 per share. The dividends are expected to grow at 40 percent for the next 10 years and then level off to a growth rate of 6 percent indefinitely. |

If the required return is 15 percent, what is the price of the stock today? |

Answer #1

Present value = Future value/(1+i)^n

i = interest rate per period

n= number of periods

value of stock = Present value of dividends + Horizontal value

Horizontal value = dividend next year/(Required return - growth rate)

= 1.5 * 1.4^10*1.06/(0.15-0.06)

= 511.016557124

Value of stock = 1.5*1.4/1.15 +1.5*1.4^2/1.15^2 + 1.5*1.4^3/1.15^3 + 1.5*1.4^4/1.15^4 + 1.5*1.4^5/1.15^5 + 1.5*1.4^6/1.15^6 + 1.5*1.4^7/1.15^7 + 1.5*1.4^8/1.15^8 + 1.5*1.4^9/1.15^9 + 1.5*1.4^10/1.15^10 + 511.016557124/1.15^10

= 177.98

A7X Corp. just paid a dividend of $1.55 per share. The
dividends are expected to grow at 30 percent for the next 7 years
and then level off to a growth rate of 8 percent indefinitely.
If the required return is 14 percent, what is the price of the
stock today?

Thirsty Cactus Corp. just paid a dividend of $1.20 per share.
The dividends are expected to grow at 25 percent for the next 9
years and then level off to a 6 percent growth rate indefinitely.
Required : If the required return is 14 percent, what is the price
of the stock today?

A7X Corp. just
paid a dividend of $1.40 per share. The dividends are expected to
grow at 30 percent for the next 9 years and then level off to a
growth rate of 8 percent indefinitely.
If the required
return is 14 percent, what is the price of the stock
today?
Multiple Choice
$82.18
$2.72
$110.05
$107.89
$105.74

A7X Corp. just paid a dividend of $1.32 per share. The dividends
are expected to grow at 12 percent for the next eight years and
then level off to a growth rate of 2.5 percent indefinitely. If the
required return is 8 percent, what is the price of the stock
today?
Select one:
A. $28.85
B. $60.91
C. $64.18
D. $45.39
E. $52.87

Upper Gullies Corp. just paid a dividend of $2.70 per share. The
dividends are expected to grow at 19 percent for the next eight
years and then level off to a 7 percent growth rate indefinitely.
If the required return is 14 percent, what is the price of the
stock today? (Do not round intermediate calculations. Round
the final answer to 2 decimal places.)
Stock price
$

Could I Industries just paid a dividend of $1.32 per share. The
dividends are expected to grow at a rate of 17.5 percent for the
next five years and then level off to a growth rate of 6 percent
indefinitely. If the required return is 14 percent, what is the
value of the stock today?

Could I Industries just paid a dividend of $1.30 per share. The
dividends are expected to grow at a rate of 15 percent for the next
five years and then level off to a growth rate of 6 percent
indefinitely. If the required return is 12 percent, what is the
value of the stock today? (Do not round intermediate calculations.
Round your answer to 2 decimal places.) Price:

ZZZ Industries just paid a dividend of $1.35 per share. The
dividends are expected to grow at a 27 percent rate for the next 5
years and then level off to a 3 percent growth rate indefinitely.
If the required return is 8.51 percent, what is the value (in $) of
the stock today? Answer to two decimals, carry
intermediate calculations to four decimals.
****show step****

Could I Industries just paid a dividend of $1.15 per share. The
dividends are expected to grow at a rate of 18 percent for the next
six years and then level off to a growth rate of 7 percent
indefinitely. If the required return is 15 percent, what is the
value of the stock today? (Do not round intermediate calculations.
Round your answer to 2 decimal places.)

Could I Industries just paid a dividend of $1.34 per share. The
dividends are expected to grow at a rate of 19.3 percent for the
next five years and then level off to a growth rate of 6 percent
indefinitely. If the required return is 10 percent, what is the
value of the stock today?
(Do not round intermediate calculations. Round your answer to 2
decimal places.)

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 18 seconds ago

asked 4 minutes ago

asked 8 minutes ago

asked 9 minutes ago

asked 11 minutes ago

asked 11 minutes ago

asked 17 minutes ago

asked 18 minutes ago

asked 19 minutes ago

asked 32 minutes ago

asked 32 minutes ago

asked 34 minutes ago