What are the expected dividend yield and capital gains

Assignment Help Finance Basics

Reference no: EM13288349

Assume that a corporation is a constant growth company whose last dividend (D0, which was paid yesterday) was $2.00 and whose dividend is expected to grow indefinitely at a 6% rate. The discount rate is 13%. What is the firm's expected dividend stream over the next 3 years? What is the firm's current stock price? What is the stock's expected value one year from now? Now assume that the stock is currently selling at $30.29. What is its expected rate of return? Now assume that corporation's dividend is expected to experience supernormal growth of 30% from Year 0 to Year 1, 20% from Year 1 to Year 2, and 10% from Year 2 to Year 3. After Year 3, dividends will grow at a constant rate of 6%. What is the stock's intrinsic value under these conditions? What are the expected dividend yield and capital gains yield during the first year?

Reference no: EM13288349

Questions Cloud

Define the role of a spin vane or boiling stones : Explain the role of a spin vane or boiling stones that are added to a liquid that is to be heated or distilled

Calculate how much work is done on the capacitor : A large parallel plate capacitor has plate separation of 0.85 cm and plate area of 391 cm2. How much work is done on the capacitor as the plate separation is increased to 1.70 cm

What is the bonds nominal yield to call : Walker Industries has a bond outstanding with 12 years to maturity, a 9% coupon paid semiannually, and a $1,000 par value. The bond has a 7% nominal yield to maturity, but it can be called in 3 years at a price of $1,045. What is the bond's nomina..

Explain what concentration of sodium chloride in water : What concentration of sodium chloride in water is needed to produce an aqueous solution isotonic with blood (blood, pi=7.70 atm at 25 degree C)

What are the expected dividend yield and capital gains : After Year 3, dividends will grow at a constant rate of 6%. What is the stock's intrinsic value under these conditions? What are the expected dividend yield and capital gains yield during the first year?

Calculate the frequency of the tuning fork : The temperature of the air in a resonator is 15°C, when a tuning fork vibrates at one end, calculate the frequency of the tuning fork

Explain why should you never heat a cooled system : Why should you never heat a cooled system, and how does this rule apply to distillation

What the company obligations are as a result of transaction : The system schedules the development of the software by assigning a timeline and allocating personnel to the project. The development will take 3 weeks.

Obtain the capacitance of the system : Two conductors having net charges of +15.0 µC and -15.0 µC have a potential difference of 15.0 V between them, obtain the capacitance of the system

User Account

All Pages