Current value of feinstein breweries common stock

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Reference no: EM13858222

Problem 1: Feinstein's Breweries currently (d0) pays a $1.00 common stock dividend. Dividends have been recently growing at a 10 percent annual rate and are expected to continue growing at this rate for the next three years. Thereafter the growth rate is expected to be 5 percent for the foreseeable future.

Current Dividend

$1.00

1st Growth Rate

10%

2nd Growth Rate

5%

Required Rate of Return

13%

What is the current value of Feinstein's Breweries' common stock to an investor requiring a 13% rate of return?

Problem 2: Brooksman's High Roller Casinos currently (d0) pays $5.00 common stock dividend. Dividends have been recently growing at a 12 percent annual rate and are expected to continue growing at this rate for the next four years. Thereafter the growth rate is expected to be 6 percent for the foreseeable future.

Current Dividend

$5.00

1st Growth Rate

12%

2nd Growth Rate

6%

Required Rate of Return

15%


What is the current value of Brooksman's High Roller Casinos common stock to an investor requiring a 15% rate of return?

Reference no: EM13858222

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