If the expected rate of return rcirc is less than the

Reference no: EM13392502

1. Calculate the dividend for year 15 if Do is $2.50 and growth is 6%. D15 = $__________ (3 pts.)

2. Calculate the dividend for each year from D1 through D5 assuming Do is $4 and growth is 7%.

D1 = $
D2 = $
D3 = $
D4 = $
D5 = $

3. Calculate the price of the stock today if Do is $1.00 and growth is 6%. Assume the required rate of return on common stock, rs, is 10%. $_______(3 pts.)

4. If you know that the required rate of return, r, on Stock A is 12%, and the dividend yield is 5%, what is the capital gains yield?_____% (2 pts.)

5. If P1 is $24.61, and Po is $22.97, what is the capital gains yield? ______% (2 pts.)The total return, r, is 15%. What is the dividend yield? ______% (2 pts.)

6. If the dividend, D1, is $1.92, and Po is $23.50, what is the dividend yield? ____% If the total rate of return, r, is 14%, what is the capital gains yield? _____% (2 pts. each)

7. If the expected rate of return, rˆ, is less than the required rate of return, r, should you buy the stock? Yes -- No. Circle your answer. 2 pts.If you already own the stock, should you keep it or sell it? Circle your answer. 2pts.

8. The price of preferred stock X is $65.00, and the dividend per share is 7% of the par value of $100. Calculate the required rate of return on the preferred stock, rp. _____% 4 pts.

9. If the required rate of return on preferred stock Y with an $8 dividend is 12%, what is the price of the stock? Vp = %___________ 4 pts.

10. Stock Z will pay a dividend of $3.00, but forecasts no growth in the dividend. The current price of the stock, Po, is $30. Calculate the required rate of return, rs. 4 pts.

11. If the dividend on this no growth stock is $1.15 and rs is 13%, calculate Po. 4 pts.

12. If the growth rate (g) is 6%, the price of the stock today (Po) is $24, the dividend today (Do) is $1.00, what is the dividend yield, the capital gains yield, and the total yield, r, (r = required rate of return or total yield). 6 pts.Dividend Yield ___________% Capital Gains Yield _____________% Total Yield (required rate of return) ______________%

13. What is the expected price of Stock C four years from now if growth (g) is 6%, and the investors are requiring 11%, (the required rate of return, r, is 11%), and the current dividend, Do, is $1.75. Calculate expected Pˆ4. 5 pts.

14. Suppose the dividend today, Do, is $2.50, and the growth rate (g) is expected to be 25% for the next three years, followed by a normal growth rate (g) of 6% thereafter. Assume the investors require 13%, rs. Calculate the value of the stock today, Po. This is the supernormal growth problem. 25 pts

Reference no: EM13392502

Questions Cloud

Construct a scatter diagram showing the relationship : 1. an analyst has modeled the stock of crisp trucking using a two-factor apt model. the risk free rate of return is

Review the four management functions and find out which : management please respond to the followingmiddot review the four management functions and determine which represents

Provide a rationale for why your target market segmentation : choose an organization and a product in that organization you would like to analyze from a marketing perspective and

You work for the local construction firm devry engineering : you work for a local construction firm devry engineering group and your supervisor wants to test your knowledge and

If the expected rate of return rcirc is less than the : 1. calculate the dividend for year 15 if do is 2.50 and growth is 6. d15 3 pts.2. calculate the dividend for each

Pick an industry that is of interest to you what did you : pick an industry that is of interest to you. what did you identify as your indicator of potential market size? what

Financial performance measures are vitally significant to : business culture is the context in which the measures exist. they are bound to each other in terms of context and

Te company applies manufacturing overhead on the basis of : jobnbsp728 was recently completed. the following data have been recorded on its job cost sheetdirect

The next three years and by 140 percent in fourth year : your finance text book sold 56500 copies in its first year. the publishing company expects the sales to grow at a rate

User Account

All Pages