Question

The annual dividend for ABC Inc was $2.20 per share and the firm's required rate of return is 15%. If dividends are expected to grow at 7% annually for 3 years followed by the 4% constant annual growth from year 4 to infinity, find the intrinsic value of ABC's share.

Answer #1

Lawrence Industries' most recent annual dividend was $2.52
per share (D0equals$ 2.52), and the firm's required return is
15%. Find the market value of Lawrence's shares when dividends
are expected to grow at 25% annually for 3 years, followed by a
5% constant annual growth rate in years 4 to infinity.
The market value of Lawrence's shares is $____

Common stock valuelong dashVariable growth Lawrence
Industries' most recent annual dividend was $2.46 per share
(D0equals$ 2.46), and the firm's required return is 12%. Find
the market value of Lawrence's shares when dividends are expected
to grow at 15% annually for 3 years, followed by a 7% constant
annual growth rate in years 4 to infinity.
The market value of Lawrence's shares is $ . (Round to the
nearest cent.)

Common stock valuelong dash—Variable growth Lawrence Industries'
most recent annual dividend was $1.09 per share (D0equals=$ 1.09),
and the firm's required return is 11%. Find the market value of
Lawrence's shares when dividends are expected to grow at 20%
annually for 3 years, followed by a 5% constant annual growth rate
in years 4 to infinity.

Common stock value—Variable growth: Lawrence Industries' most
recent annual dividend was $2.46 per share (D0=$2.46), and the
firm's required return is 10%. Find the market value of
Lawrence's shares when dividends are expected to grow at 8%
annually for 3 years, followed by a 5% constant annual growth
rate in years 4 to infinity.
The market value of Lawrence's shares is
$______. (Round to the nearest cent.)

9. ABC, Inc stock currently sells for $45 per share. The market
requires a 9 percent return on the firm's stock. If the company
maintains a constant 5.5 percent growth rate in dividends, what was
the most recent dividend per share paid on the stock?
10. ABC, Inc pays dividends annually. The expected dividend
payment in year 5 is $12.00. The growth rate, which is currently
15%, is expected to decline linearly over six years, between year 5
and year...

4. Apple’s most recent annual dividend was $2.00 per share. If
the required rate of return is 12%, find the
market value of Apples’ share when:
a. Dividends are expected to grow at an annual rate of 0% to
infinity. (2)
b. Dividends are expected to grow at an annual rate of 5% to
infinity. (2)
c. Dividends are expected to grow at an annual rate of 4% for
the first 2 years and then grow at an annual
rate...

ABC Company's last dividend was $0.7. The dividend growth rate
is expected to be constant at 7% for 4 years, after which dividends
are expected to grow at a rate of 4% forever. The firm's required
return (rs) is 15%. What is its current stock price (i.e. solve for
Po)?

1. An investor requires a return of 12 percent. A stock sells
for $18, it pays a dividend of $1, and the dividends compound
annually at 6 percent. What should the price of the stock be?
2. You are considering a stock A that pays a dividend of $1.
The beta coefficient of A is 1.3. The risk free return is 6%, while
the market average return is 13%.
a. What is the required return for Stock A?
b. If...

SCI just paid a dividend ( D0 ) of $3.12 per share, and its
annual dividend is expected to grow at a constant rate (g) of 6.50%
per year. If the required return ( rs ) on SCI’s stock is 16.25%,
then the intrinsic value of SCI’s shares is per share. Which of the
following statements is true about the constant growth model? The
constant growth model can be used if a stock’s expected constant
growth rate is less than...

ABC Company's last dividend was $3.5. The dividend growth rate
is expected to be constant at 6% for 4 years, after which dividends
are expected to grow at a rate of 4% forever. The firm's required
return (rs) is 9%. What is its current stock price (i.e. solve for
Po)?

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 18 minutes ago

asked 24 minutes ago

asked 33 minutes ago

asked 41 minutes ago

asked 46 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago

asked 2 hours ago