What is the current value of one share of this stock

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1. Character Co. offers a common stock that pays an annual dividend of $3.36 a share. The company has promised to maintain a constant dividend. How much are you willing to pay for one share of this stock if you want to earn a 7.82 percent return on your equity investments?

2. The Onboard Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 23.3 percent a year for the next 3 years and then decreasing the growth rate to 3.1 percent per year. The company just paid its annual dividend in the amount of $2.51 per share. What is the current value of one share of this stock if the required rate of return is 9 percent?

3. Orca, Inc. announced today that it will begin paying annual dividends. The first dividend will be paid next year in the amount of $1.94 a share. The following dividends will be $1.15, $1.57, and $2.13 a share annually for the following three years, respectively. After that, dividends are projected to increase by 3 percent per year. How much are you willing to pay today to buy one share of this stock if your required rate of return is 13.5 percent?

Reference no: EM132015995

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