Determining expected dividend per share

Reference no: EM1313977

1) Harrison Clothiers' stock presently sells for $20 a share. It now paid the dividend of $1.00 a share (that is, D_o=$1.00). Dividend is expected to grow at the constant rate of 6% a year. What stock price is expected 1 year from now? What is the required rate of return?

2) Preferred stock returns Bruner Aeronautics has perpetual preferred stock outstanding with the par value of= $100. Stock pays the quarterly dividend of $2, and its present price is $80.

a) Determine its nominal annual rate of return?

b) Determine its effective annual rate of return?

3) Portfolio required return Assume you are money manager of a $4 million investment fund. Fund consists of 4 stocks with following investments and betas:

Stock	Investment	Beta
A	400000	1.5
B	600000	-0.5
C	1000000	1.25
D	2000000	0.75

If market's required rate of return is 14% and risk-free rate is 6%, determine the fund's required rate of return?

4) DPS Calculation Warr Corporation now paid the dividend of $1.50 a share (that is, D_o = $1.50). Dividend is expected to grow 7% a year for next 3 years and then at 5% a year after that. Determine the expected dividend per share for each of the next five years?

Reference no: EM1313977

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