Question

herbivores vegetarian delights (hvd) corporation plans to pay a dividend of $2.51. dividends will grow at...

herbivores vegetarian delights (hvd) corporation plans to pay a dividend of $2.51. dividends will grow at a rate of 6.00% for 3 years then return to the normal growth rate of 4.00% for the foreseeable future. if the required rate of return is 10.00% what is the current price of a share of HVD common stock?

Homework Answers

Answer #1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Herbovore's Vegetarian Delites Corporation (HVD) plans to pay a dividend of $1.06. Dividends will grow at...
Herbovore's Vegetarian Delites Corporation (HVD) plans to pay a dividend of $1.06. Dividends will grow at a rate of 3.00% for 4 years then return to the normal growth rate of 1.00% for the foreseeable future. If the required rate of return is 8.00%, what is the current price (P0) of a share of HVD common stock? Group of answer choices $3.66 $16.31 $16.69 $15.95
A stock currently pays a $2 dividend. This dividend is expected to grow at 4.5% growth...
A stock currently pays a $2 dividend. This dividend is expected to grow at 4.5% growth for the foreseeable future. The current price is $28. What is the required rate of return on this stock?
1) A stock just paid a dividend of $0.50. If the dividend is expected to grow...
1) A stock just paid a dividend of $0.50. If the dividend is expected to grow 3% per year, what will the price be if the required return is 9%? 2) A stock is expected to pay a dividend of $1 at the end of the year. The required rate of return is 11%, and the expected growth rate is 5%. What is the current stock price? 3) A stock just paid a dividend of $1. The required rate of...
Angus Corporation paid a dividend of $1.25 per share last year. Dividends are expected to grow...
Angus Corporation paid a dividend of $1.25 per share last year. Dividends are expected to grow at a rate of 5% per year into the foreseeable future. 1) Assume the current Treasury security rate is 4% and the average S&P 500 market return is 8%. ValueLine is reporting a beta of 1.35 for Angus. How much do you think a share of Angus stock is worth? 2) If Angus’ shares are currently selling for $35, what is the expected rate...
Pegasus Tours plans to pay a dividend of $1.80 next year, and they anticipate that dividend...
Pegasus Tours plans to pay a dividend of $1.80 next year, and they anticipate that dividend payments will grow by 3.5% every year for the foreseeable future. The market price of the stock is $27.90.  The company's expected rate of return or cost of equity is closest to: 10.20%. 14.94%. 26.89%.
fast grow corporation is expecting dividends to grow at 20% rate for the next two years....
fast grow corporation is expecting dividends to grow at 20% rate for the next two years. the corporation just paid a $2 dividend and the next dividend will be paid one year from now. after two years of rapid growth, dividends are expected to grow at a constant rate 9%forever. if the required return is 14%, what is the value of fast grow corporation common stock today?
The OWB Company paid $2.1 of dividends this year. If its dividends are expected to grow...
The OWB Company paid $2.1 of dividends this year. If its dividends are expected to grow at a rate of 3 percent per year, what is the expected dividend per share for OWB five years from today? The current price of ABC stock is $35 per share. If ABC’s current dividend is $1.5 per share and investors ‘required rate of return is 10 percent, what is the expected growth rate of dividends for ABC. Use constant dividend growth model. Consider...
A stock is expected to pay dividends in 5 periods. The first dividend will be $4.80...
A stock is expected to pay dividends in 5 periods. The first dividend will be $4.80 and subsequent dividends are forecasted to stay constant for the foreseeable future. If the required return on the stock is 17.0%, what is its current value? Your Answer:
Stella Corporation just paid a $3.00 dividend this morning. Analysts believe that the company's dividends will...
Stella Corporation just paid a $3.00 dividend this morning. Analysts believe that the company's dividends will grow 30% per year for each of the next 2 years. after the second year, analysts believe that dividends will grow constantly into the foreseeable future at 4% per year. if analysts believe that Stella Corporation stock should earn a required return of 12% per year, what is the intrinsic value of a share its stock today?
A company plans to pay no dividends in the next 3 years because it needs earnings...
A company plans to pay no dividends in the next 3 years because it needs earnings to finance new investment projects. The firm will pay a $3.00 per share dividend in year 4 and will increase the dividend by 20% per year for the next 3 years (i.e., year 5 to year 7). After that the company will maintain a constant dividend growth rate of 6 percent per year forever. The required return on the stock is 16% per year....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT