Question

Cheap & Safe Fuel Energy, Corp. just paid a dividend of $ 3.75 per share. The firm’s dividend is expected to grow at 20% for the next five (5) years. After that the growth rate is expected to be 6% forever. If investors require a return of 8% for investing in the stock of companies of similar risk, what is the value of the stock?

Answer #1

Calculate the current stock price as follows:

Formulas:

IBM just paid a dividend of $1.2 per share. You expect IBM's
dividend to grow at a rate of 10% per year for the next three
years, and then you expect constant dividend growth of 5% forever.
Based on the risk of IBM stock, you require a return of 8%. Using
the dividend discount model, what is the value of IBM stock?

A7X Corp. just
paid a dividend of $1.50 per share. The dividends are expected to
grow at 40 percent for the next 10 years and then level off to a
growth rate of 6 percent indefinitely.
If the required
return is 15 percent, what is the price of the stock today?

A7X Corp. just paid a dividend of $1.55 per share. The
dividends are expected to grow at 30 percent for the next 7 years
and then level off to a growth rate of 8 percent indefinitely.
If the required return is 14 percent, what is the price of the
stock today?

Spotify just paid a cash dividend of $1 per share. Investors
require a 16% return from investments such as this. What is the
value of Spotify stock if the dividend is expected to grow at 25
percent for the next four years before settling at a 5% growth rate
thereafter?

Weston Corporation just paid a dividend of $3.75 a share (i.e.,
D0 = $3.75). The dividend is expected to grow 8% a year
for the next 3 years and then at 3% a year thereafter. What is the
expected dividend per share for each of the next 5 years? Round
your answers to two decimal places.
d1=
d2=
d3=
d4=
d5=

Thirsty Cactus Corp. just paid a dividend of $1.20 per share.
The dividends are expected to grow at 25 percent for the next 9
years and then level off to a 6 percent growth rate indefinitely.
Required : If the required return is 14 percent, what is the price
of the stock today?

A7X Corp. just
paid a dividend of $1.40 per share. The dividends are expected to
grow at 30 percent for the next 9 years and then level off to a
growth rate of 8 percent indefinitely.
If the required
return is 14 percent, what is the price of the stock
today?
Multiple Choice
$82.18
$2.72
$110.05
$107.89
$105.74

Upper Gullies Corp. just paid a dividend of $2.70 per share. The
dividends are expected to grow at 19 percent for the next eight
years and then level off to a 7 percent growth rate indefinitely.
If the required return is 14 percent, what is the price of the
stock today? (Do not round intermediate calculations. Round
the final answer to 2 decimal places.)
Stock price
$

A7X Corp. just paid a dividend of $1.32 per share. The dividends
are expected to grow at 12 percent for the next eight years and
then level off to a growth rate of 2.5 percent indefinitely. If the
required return is 8 percent, what is the price of the stock
today?
Select one:
A. $28.85
B. $60.91
C. $64.18
D. $45.39
E. $52.87

XYZ Corp. just paid a dividend today of $6.25 per share. The
dividend is expected to grow at a constant rate of 5.5% per year.
If XYZ Corp. stock is selling for $40.00 per share, what is the
stockholders' expected rate of return? Submit your answer as a
percentage and round to two decimal places

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 1 minute ago

asked 9 minutes ago

asked 13 minutes ago

asked 21 minutes ago

asked 25 minutes ago

asked 26 minutes ago

asked 31 minutes ago

asked 32 minutes ago

asked 40 minutes ago

asked 47 minutes ago

asked 58 minutes ago

asked 59 minutes ago