Question

The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.60 per share on its stock. The...

The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.60 per share on its stock. The dividends are expected to grow at a constant rate of 6% per year indefinitely.

(a)   If investors require a 12 percent return on its stock, what is the current price?
(b) What will the price be in 15 years (at the same rate of return as above)?

Please show steps for how to solve in Excel

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Price of a share is equal to the present value of all future dividends.

Dividend already paid is not relevant since not received. Dividends to be received are relevant

Formulae are:

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.32 per share on its stock....
1. The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.32 per share on its stock. The dividends are expected to grow at a constant rate of 7 percent per year indefinitely. Required: (a) If investors require a 15 percent return on The Jackson-Timberlake Wardrobe Co. stock, what is the current price? what will the price be in 17years?
The Jackson–Timberlake Wardrobe Co. just paid a dividend of $1.03 per share on its stock. The...
The Jackson–Timberlake Wardrobe Co. just paid a dividend of $1.03 per share on its stock. The dividends are expected to grow at a constant rate of 2.75 percent per year indefinitely. Investors require a return of 6.74 percent on the company's stock. What will the stock price be in 10 years?
The Jackson–Timberlake Wardrobe Co. just paid a dividend of $1.81 per share on its stock. The...
The Jackson–Timberlake Wardrobe Co. just paid a dividend of $1.81 per share on its stock. The dividends are expected to grow at a constant rate of 1.01 percent per year indefinitely. Investors require a return of 5.8 percent on the company's stock. What will the stock price be in 10 years?
The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.32 per share on its stock. The...
The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.32 per share on its stock. The dividends are expected to grow at a constant rate of 5 percent per year indefinitely.    Required: (a) If investors require a 12 percent return on The Jackson-Timberlake Wardrobe Co. stock, what is the current price?   (Click to select)   $19.40   $18.86   $20.20   $7.76   $19.80    (b) What will the price be in 5 years?   (Click to select)   $24.07   $25.78   $24.76   $25.27   $9.91
1) The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.48 per share on its stock....
1) The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.48 per share on its stock. The dividends are expected to grow at a constant rate of 7 percent per year indefinitely. Required: (a) If investors require a 13 percent return on The Jackson-Timberlake Wardrobe Co. stock, what is the current price? (b) What will the price be in 8 years? 2) Antiques R Us is a mature manufacturing firm. The company just paid a $5 dividend, but management expects...
The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.20 per share on its stock. The...
The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.20 per share on its stock. The dividends are expected to grow at a constant rate of 4 percent per year indefinitely. Investors require a return of 10 percent on the company's stock. a. What is the current stock price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What will the stock price be in 3 years? (Do not round intermediate calculations and...
The Jackson–Timberlake Wardrobe Co. just paid a dividend of $1.85 per share on its stock. The...
The Jackson–Timberlake Wardrobe Co. just paid a dividend of $1.85 per share on its stock. The dividends are expected to grow at a constant rate of 4 percent per year indefinitely. Investors require a return of 12 percent on the company's stock.    What is the current stock price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)   Current price $ What will the stock price be in three years? (Do not round intermediate...
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...
1. The ArtForAll Co. (AFA )just paid a dividend of $1.75 per share on its stock....
1. The ArtForAll Co. (AFA )just paid a dividend of $1.75 per share on its stock. The dividends are expected to grow at a constant rate of 4% per year indefinitely. If investors require a return of 10% on AFA’s stock: What is the current price? What will the price be in 3 years? In 10 years?
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?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT