What is the stock current price

Assignment Help Finance Basics

Reference no: EM131900852

Stock Valuation Questions -

Q1. A stock is expected to pay a dividend of $3.00 at the end of the year (D₁ = 3.0). The required rate of return is r_s = 8%, and the expected constant growth rate is g = 2.0%. What is the stock's current price?

Q2. Star Manufacturing is expected to pay a dividend of $2.00 per share at the end of the year (D₁ = $2.00). The stock sells for $60 per share, and its required rate of return is 11%. The dividend is expected to grow at some constant rate, g, forever. What is the equilibrium expected growth rate?

Q3. If D₀ = $1.20, g (which is constant) = 4%, and P₀ = $30.00, what is the stock's expected dividend yield for the coming year? Hint: You need to find D₁ first.

Q4. Atlas Mines has adopted a policy of increasing the annual dividend on its common stock at a constant rate of 3.00 percent annually. The firm just paid an annual dividend of $1.50.

(1) What will the dividend be two years from now?

(2) What will the dividend be five years from now?

(3) What will the dividend be ten years from now?

Q5. Food Inc. just announced it is increasing its annual dividend to $2.50 next year and establishing a policy whereby the dividend will increase by 4.00 percent annually thereafter. Assuming the required rate of return is 9.00 percent.

(1) What will the stock price per share be five years from now?

(2) What will the stock price per share be ten years from now?

(3) What will the stock price per share be twenty years from now?

Q6. 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, $0.40, $0.50, and $0.60 a share annually for the following 4 years, respectively. After that, dividends are projected to increase by 4.0 percent per year. How much are you willing to pay to buy one share of this stock today if your desired rate of return is 12.0 percent?

Q7. XYZ Firm recently paid $3.00 as an annual dividend. Future dividends are projected at $3.50, $4.00, $4.50, and $5.00 over the next 4 years, respectively. Beginning 5 years from now, the dividend is expected to increase by 4.0 percent annually. What is one share of this stock worth to you if you require a 12.0 percent rate of return on similar investments?

Note: Please show me your calculation process!

Reference no: EM131900852

Questions Cloud

Determine and explain entry strategies for global expansion : Prepare the final Strategic Business Plan-Part II-Strategic Plan to the Executive Board. Ensure your strategic plan is thorough, succinct, and complete.

Direct access to the hyper-v hosts : Describe the steps you should take so that developers manage their own machines yet not have direct access to the Hyper-V hosts.

Define correlation between job tasks and candidate criteria : Analyze the process used to tie job descriptions to criteria for candidate selection, paying particular attention to the validity of the correlation.

Are such practices ethical : Are such practices ethical? Are consumers being deceived when a firm pays for priority positioning?

What is the stock current price : The required rate of return is rs = 8%, and the expected constant growth rate is g = 2.0%. What is the stock's current price

Determine selection and acceptance rates for the position : For Nkomo 40 Exercise; this includes selection and acceptance rates for the position (you do not need to calculate the other yield rates on page 211.

Implement an example of recursion in c : Recursion is a different way to implement repeating statements. Some problems can only be solved with recursion.

How the concept of agile software development : How the concept of Agile Software Development would work in the current working areas? Some rationals would require whether it would work or not?

What is the value of the common stock : what is the value of the common stock if the investors require a 15 percent rate of? return? The value of the common stock is ?$.

User Account

All Pages