Question

The Herjavec Co. just paid a dividend of $1.35 per share on its
stock. The dividends are expected to grow at a constant rate of 3
percent per year indefinitely. Investors require a return of 10
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 calculations and round your answer to 2 decimal
places, e.g., 32.16.)**

Stock price
$

What will the stock price be in fifteen years? **(Do not
round intermediate calculations and round your answer to 2 decimal
places, e.g., 32.16.)**

Stock price
$

Answer #1

As per DDM |

Price = recent dividend* (1 + growth rate )/(cost of equity - growth rate) |

Price = 1.35 * (1+0.03) / (0.1 - 0.03) |

Price = 19.86 |

Dividend yield = dividend in 1 year/current stock price |

= recent dividend* (1 + growth rate )/price = 1.35*(1+0.03)/19.86=7%

Capital gains yield = required rate-dividend yield |

= 10-7 = 3%

Stock price in 3 years= (1+capital gains yield)^3 |

= 19.86*(1+0.03)^3=21.7

Stock price in 15 = (1+capital gains yield)^15 |

= 19.86*(1+0.03)^15=30.94

The Nearside Co. just paid a dividend of $1.55 per share on its
stock. The dividends are expected to grow at a constant rate of 6
percent per year, indefinitely. Investors require a return of 14
percent on the stock.
a.
What is the current price? (Do not round intermediate
calculations and round your answer to 2 decimal places, e.g.,
32.16.)
b.
What will the price be in three years? (Do not round
intermediate calculations and round your answer...

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...

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...

FinanceIsFun just paid a dividend of $1.60 on each share of its
stock. The company expects that the dividends will increase at a
constant rate of 6 percent per year in perpetuity. Investors
require a 10 percent return on this company's stock.
Calculate the current stock price. (Do not round
intermediate calculations and round your final answer to 2 decimal
places, e.g., 32.16.)
Current price
$
Calculate the stock price in three years. (Do not round
intermediate calculations and...

Bretton, Inc., just
paid a dividend of $3.00 on its stock. The growth rate in dividends
is expected to be a constant 4 percent per year, indefinitely.
Investors require a return of 11 percent on the stock for the first
three years, a rate of return of 9 percent for the next three
years, and then a return of 7 percent thereafter.
What is the
current share price for the stock? (Do not round
intermediate calculations and round your answer...

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...

Sea Side, Inc., just paid a dividend of $2.32 per share on its
stock. The growth rate in dividends is expected to be a constant
5.9 percent per year indefinitely. Investors require a return of 22
percent on the stock for the first three years, then a return of 17
percent for the next three years, and then a return of 15 percent
thereafter. What is the current share price? (Do not round
intermediate calculations. Round your answer to 2...

Sea Side, Inc., just
paid a dividend of $2.24 per share on its stock. The growth rate in
dividends is expected to be a constant 6.3 percent per year
indefinitely. Investors require a return of 20 percent on the stock
for the first three years, then a return of 15 percent for the next
three years, and then a return of 13 percent thereafter. What is
the current share price? (Do not round intermediate
calculations. Round your answer to 2...

Sea Side, Inc., just paid a dividend of $2.24 per share on its
stock. The growth rate in dividends is expected to be a constant
6.3 percent per year indefinitely. Investors require a return of 20
percent on the stock for the first three years, then a return of 15
percent for the next three years, and then a return of 13 percent
thereafter. What is the current share price? (Do not round
intermediate calculations. Round your answer to 2...

Sea Side, Inc., just paid a dividend of $1.68 per share on its
stock. The growth rate in dividends is expected to be a constant
5.5 percent per year indefinitely. Investors require a return of 18
percent on the stock for the first three years, then a return of 13
percent for the next three years, and then a return of 11 percent
thereafter. What is the current share price? (Do not round
intermediate calculations. Round your answer to 2...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 2 minutes ago

asked 8 minutes ago

asked 8 minutes ago

asked 13 minutes ago

asked 20 minutes ago

asked 28 minutes ago

asked 29 minutes ago

asked 51 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago