Dividends are expected to grow at constant rate

Assignment Help Financial Management

Reference no: EM132017230

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 constant rate of 6 percent per year indefinitely. If investors require an 9.1 percent return on Sky High Co. stock, the stock price in 3 years should be $ _________ . Round it to two decimal places.

Reference no: EM132017230

Questions Cloud

What is the degree of financial leverage : What is the degree of operating leverage? What is the degree of financial leverage if 6 million units are produced and sold?

How much new long-term debt financing : What was Wallace's total long-term debt in 2016? How much new long-term debt financing will be needed in 2017?

Expects to pay the next dividend payment : Wonder Trees Inc. expects to pay the next dividend payment of $3.8 per share (D1).

Benchmarking real estate returns : Sensitivity Report information may be incorrect if. Benchmarking real estate returns:

Dividends are expected to grow at constant rate : The dividends are expected to grow at a constant rate of 2 percent per year indefinitely.

Expect the prices of these bonds to be in three years : What are the prices of these bonds today? What do you expect the prices of these bonds to be in three years?

Determine tax benefit of depreciation : The point where project produces rate of return equal to required rate of return is known as 117 In financial breakeven, determine tax benefit of depreciation.

Calculate the amortized fees and expenses for loan : Calculate the amortized fees and expenses for this loan (in dollars, provide your answer with $1 precision).

Operating leverage at accounting break-even level of output : What is the degree of operating leverage at the given level of output? What is the degree of operating leverage at the accounting break-even level of output?

User Account

All Pages