Question

The next three annual dividends paid by Oxygen Optimization stock are expected to be 6.94 dollars in one year, 3.58 dollars in two years, and 6.11 dollars in three years. The price of the stock is expected to be 88.08 dollars in two years. The expected annual return for the stock is 9.66 percent. What is the current price of one share of Oxygen Optimization stock?

Answer #1

Discount rate | 9.660% | ||

Year | 0 | 1 | 2 |

Cash flow stream |
0 | 6.94 | 91.66 |

Discounting factor | 1.000 | 1.097 | 1.203 |

Discounted cash flows project | 0.000 | 6.329 | 76.223 |

NPV = Sum of discounted cash flows | |||

NPV stock = |
82.55 (stock price) |
||

Where | |||

Discounting factor = | (1 + discount rate)^(Corresponding period in years) | ||

Discounted Cashflow= | Cash flow stream/discounting factor |

year 2 cash flow = stock price + year 2 dividend

The next three annual dividends paid by XYZ stock are expected
to be $7.43 in one year, $2.79 in two years, and $3.05 in three
years. The price of the stock is expected to be $45.78 in two
years. The expected annual return for the stock is 15.20 percent.
What is the current price of one share of XYZ stock?

Oxygen Optimization stock is currently priced at 87.28 dollars
per share. The stock is expected to pay annual dividends that are
expected to grow by 2.72 percent per year forever starting after
the next dividend is paid in 1 year. The expected return on the
stock is 11.31 percent per year. What is the dividend expected to
be in 9 years?

Oxygen Optimization stock has an expected annual return of 11.33
percent. The stock is expected to be priced at 77.87 dollars per
share in 1 year and the stock currently has an expected dividend
yield of 5.39 percent. What is the current price of the stock?

The common stock of NCP paid $1.50 in dividends last year.
Dividends are expected to grow at an annual rate of 9.30 percent
for an indefinite number of years.
a. If NCP's current market price is $25.87 per share, what is
the stock's expected rate of return?
b. If your required rate of return is 11.3 percent, what is the
value of the stock for you?
c. Should you make the investment?
a. If NCP's current market price is $25.87per...

Moody Farms just paid a dividend of $4.00 on its stock. The
growth rate in dividends is expected to be a constant 6 percent per
year indefinitely. Investors require a return of 15 percent for the
first three years, a return of 13 percent for the next three years,
and a return of 11 percent thereafter. What is the current share
price?

(Common stock valuation) The common stock of NCP paid $ 1.45
in dividends last year. Dividends are expected to grow at an annual
rate of 5.50 percent for an indefinite number of years. a. If
NCP's current market price is $ 27.23 per share, what is the
stock's expected rate of return? b. If your required rate of
return is 7.5 percent, what is the value of the stock for you? c.
Should you make the investment? (Round to two...

Indigo River Shipping stock has an expected return of 9.68
percent and pays annual dividends that are expected to grow
annually by 2.5 percent forever. The firm’s next dividend is
expected in 1 year from today. If the firm’s dividend is expected
to be 18.65 dollars in 5 years from today, then what is the current
price of the stock?

B) The common stock of AMT paid RM1.32 in dividends last year.
Dividends are expected to grow at an 8 percent annual rate for an
indefinite number of years.
i. If AMT’s current market price is RM23.50, what is the stock’s
expected rate of return?
ii. If your required rate of return is 10.5 percent, what is the
value of the stock for you?
iii. Should you make the investment, and why?

Phantom plans to pay annual dividends of $0.45, $0.60, and $0.75
a share in next three years, respectively. Afterwards, dividends
are projected to increase by 1.5 percent per year. What is the
market price of the stock today at a required return of 12.5
percent

Phantom plans to pay annual dividends of $0.45, $0.60, and $0.75
a share in next three years, respectively. Afterwards, dividends
are projected to increase by 1.5 percent per year. What is the
market price of the stock today at a required return of 12.5
percent?

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 7 minutes ago

asked 11 minutes ago

asked 15 minutes ago

asked 18 minutes ago

asked 20 minutes ago

asked 22 minutes ago

asked 28 minutes ago

asked 30 minutes ago

asked 46 minutes ago

asked 49 minutes ago

asked 51 minutes ago

asked 1 hour ago