What is the equilibrium expected growth rate

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Question -

Star Manufacturing is expected to pay a dividend of $4.00 per share at the end of the year (D1 = $4.00).  The stock sells for $200 per share, and its required rate of return is 10%.  The dividend is expected to grow at some constant rate, g, forever.  What is the equilibrium expected growth rate?

ABC Company announced today that it will begin paying annual dividends next year. The first dividend will be $0.10 a share. The following dividends will be $0.20, $0.30, $0.40, and $0.50 a share annually for the following 4 years, respectively. After that, dividends are projected to increase by 3% per year. How much are you willing to pay to buy one share of this stock today if your desired rate of return is 7.0 percent? 

XYZ Firm recently paid $1.00 as an annual dividend. Future dividends are projected at $1.50, $2.00, $2.50, and $3.00 over the next 4 years, respectively. Beginning 5 years from now, the dividend is expected to increase by 2%  annually. What is one share of this stock worth to you if you require 10 percent rate of return on similar investments?

Reference no: EM132907225

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