Question

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

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:

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 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 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 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. 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?
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The Jackson-Timberlake Wardrobe Co. just paid a dividend of
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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 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
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Round it to two decimal places
2. Sky High Co. just paid a dividend of $4.6 per share on its
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What will the price be in 3 years?

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