What should be the current stock price

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1) Which of the following statements is correct about a stock currently selling for $50 per share that has 16% expected return and a 10% expected capital appreciation?

Group of answer choices

a)Its expected dividend exceeds the actual dividend

b)Its expected return will exceed the actual return

c)It is expected to pay $3 in annual dividends

d)It is expected to pay $8 in annual dividends

2) Your company is estimated to make dividends payments of $2.1 next year, $3.6 the year after, and $4.2 in the year after that. The dividends will then grow at a constant rate of 6% per year. If the discount rate is 9% then what is the current stock price?

3) A stock will pay no dividends for the next 5 years. Then it will pay a dividend of $7.92 growing at 3.23%. The discount rate is 11.1%. What should be the current stock price?

Reference no: EM132658671

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