Reference no: EM132620361

Question 1: Ottocell Motor Company just paid a dividend of $1.40. Analysts expect its dividend to grow at a rate of 10 percent next year, 8 percent for the following two years, and then a constant rate of 5 percent thereafter. What is the expected dividend per share at the end of year 5?

Question 2: Mac Inc. has just now paid a dividend of $2.50 per share (Div0); its dividends are expected to grow at a constant rate of 4 percent per year forever. If the required rate of return on the stock is 14 percent, what is the current value of the stock, after paying the dividend?
Group of answer choices

Question 3: ABC Inc. is expected to pay a dividend of $1.50 per share at the end of year 1(Div1), and the dividends are expected to grow at a constant rate of 2 percent forever. If the current price of the stock is $30 per share, calculate the expected return or the cost of equity capital for the firm.

Question 4: Firm X just paid a dividend of $2.50 today. Suppose that the firm's dividend is expected to grow at a rate of 18 percent per year for the next three years. After that, dividend growth is expected to slow to 3 percent per year and remain at that level into the foreseeable future. What is the dividend at the end of year 4 (Div 4)?

Question 5: Firm X just paid a dividend of $2.50 today. Suppose that the firm's dividend is expected to grow at a rate of 18 percent per year for the next three years. After that, dividend growth is expected to slow to 3 percent per year and remain at that level into the foreseeable future. If Firm X's required return on equity is 11 percent, what is the price of Firm X's stock at the end of year 3.
Note: P3 = Div4/(r - g)

Question 6: Firm X just paid a dividend of $2.50 today. Suppose that the firm's dividend is expected to grow at a rate of 18 percent per year for the next three years. After that, dividend growth is expected to slow to 3 percent per year and remain at that level into the foreseeable future. If Firm X's required return on equity is 11 percent, estimate the intrinsic value of Firm X's common shares today based on the two-stage growth model.