Question

A company has announced that it will pay a dividend of $0.91 per share next year, and thereafter you expect the dividend to grow at a constant rate of 4.3% per year indefinitely into the future. If the required rate of return is 10.4% per year, what would be a fair price for the stock today? (Answer to the nearest penny.)

Answer #1

**FAIR PRICE = 14.92**

A company just paid a dividend of $0.81 per share and you expect
the dividend to grow at a constant rate of 4.1% per year
indefinitely into the future. If the required rate of return is
12.4% per year, what would be a fair price for this stock today?
(Answer to the nearest penny per share.)

A company just paid a dividend of $1.30 per share. The consensus
forecast of financial analysts is a dividend of $1.70 per share
next year and $2.30 per share two years from now. Thereafter, you
expect the dividend to grow 4% per year indefinitely into the
future. If the required rate of return is 11% per year, what would
be a fair price for this stock today? (Answer to the nearest
penny.)

Suppose that investors expect Luna Holdings to pay a dividend
next year of $1.48 per share, and they expect that dividend to
continue growing at 4.3% per year indefinitely. What would they pay
for Luna Holdings stock if the required rate of return on the
stocks is about 7.5%?

A company is expected to pay a dividend of $1.49 per share one
year from now and $1.93 in two years. You estimate the risk-free
rate to be 4.2% per year and the expected market risk premium to be
5.6% per year. After year 2, you expect the dividend to grow
thereafter at a constant rate of 5% per year. The beta of the stock
is 1.4, and the current price to earnings ratio of the stock is 17.
What...

A stock will pay a dividend of $3.5 exactly one year from now.
Future dividends will grow at 19% for the following 2 years and
then a constant 4% every year thereafter. If the stock's required
rate of return is 13.2%, what is a fair price for the stock today?
Round your answer to the nearest penny.

Dvorak Enterprises is expected to pay a stable dividend of $7
per share per year for the next 8 years. After that, investors
anticipate that the dividends will grow at a constant rate of 3
percent per year indefinitely. If the required rate of return on
this stock is 12 percent, what is the fair market value of a share
of Dvorak?

Suppose that a company announced that it will pay a dividend next
year of 5KD. Then the company will increase it's dividend by 6% per
tear for two years after which it will maintain a constant 4%
dividend growth rate. What is one share worth today at a required
rate of return of 15%?

Virtual Travel's stock announced that the next dividend is going
to be $2.00. The dividend is expected to grow by 15% in year 2 and
10% in year 3, and thereafter grow at a constant rate of 5%
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A) $37.95
B) $29.54
C) $44.78
D) $36.32
E) $32.43

General Importers announced that it will pay a dividend of $3.65
per share one year from today. After that, the company expects a
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years. Then, 6 years from today, the company will begin paying an
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TMD Ltd is expected to pay a dividend of $1.00 per share next
year and market analysts expect
this dividend to grow at 12% p.a. the following year, 10% p.a.
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year after that, before stabilizing at 6% p.a. for the
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to:
a) $51.83.
b) $55.68.
c) $56.52.
d) $70.52

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