Question

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?

Answer #1

Let the Dividends paid this year be D_{0}

=> D1 = 1.25*D_{0}

D2 = 1.25^{2}*D_{0}

D3 = 1.25^{3}*D_{0}

D4 = 1.25^{3}*1.17*D_{0}

D5 = 1.25^{3}*1.17*1.05*D_{0}

Rate of interest = r = 11%

Growth rate indefenitely = g = 5%

According to Gordon Growth model,

P4 = D5/(r-g)

=> P4 = 1.25^{3}*1.17*1.05*D_{0}/(0.11 -
0.05)

PV of the stock = D1/(1+r) + D2/(1+r)^{2} +
D3/(1+r)^{3} + D4/(1+r)^{4} + P4/(1+r)^{4}
= 65

=> 1.25*D_{0}/1.11 +
1.25^{2}*D_{0}/(1.11)^{2} +
1.25^{3}*D_{0}/(1.11)^{3} +
1.25^{3}*1.17*D_{0}/(1.11)^{4} +
(1.25^{3}*1.17*1.05*D_{0}/(0.11 -
0.05))/(1.11)^{4} = 65

=> 31.67D_{0} = 65 => D0 = $2.05

Hence, dividend in next period = D1 = 2.05*1.25 = $2.56

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 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.)

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 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?

Momsen Corp. is experiencing rapid growth. Dividends are
expected to grow at 25 percent per year during the next three
years, 15 percent over the following year, and then 6 percent per
year indefinitely. The required return on this stock is 10 percent,
and the stock currently sells for $79 per share. What is the
projected dividend for the coming year?
DISCLAIMER: I have seen similar questions posted but I do not
understand them, can you please try to explain...

Momsen Corp. is experiencing rapid growth. Dividends are
expected to grow at 26 percent per year during the next three
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.)

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.)

ABC Company is experiencing a rapid growth. The first dividend
will be paid next year (at year . After that, dividends are
expected to grow at 20% per year during the next two years (years 2
and 3), and then 5% per year indefinitely. The required rate of
return on this stock is 15%, and the stock is currently selling for
50TL.
What is the expected dividend for the coming year
(Div1)? (5 points)
What is the expected price of...

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?

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 9 minutes ago

asked 12 minutes ago

asked 16 minutes ago

asked 16 minutes ago

asked 19 minutes ago

asked 40 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