Reference no: EM13204807
1. Warr Corporation just paid a dividend of $4 a share (that is, D0 = $4). The dividend is expected to grow 12% a year for the next 3 years and then at 4% a year thereafter. What is the expected dividend per share for each of the next 5 years? Round your answers to two decimal places.
D1 = $
D2 = $
D3 = $
D4 = $
D5 = $
2.Thomas Brothers is expected to pay a $1.5 per share dividend at the end of the year (that is, D1 = $1.5). The dividend is expected to grow at a constant rate of 9% a year. The required rate of return on the stock, rs, is 16%. What is the stock's value per share? Round your answer to two decimal places
3.Harrison Clothiers' stock currently sells for $16 a share. It just paid a dividend of $1.5 a share (that is, D0 = 1.5). The dividend is expected to grow at a constant rate of 9% a year.
What stock price is expected 1 year from now? Round your answer to two decimal places.
What is the required rate of return? Round your answers to two decimal places.
4.Ezzell Corporation issued perpetual preferred stock with a 11% annual dividend. The stock currently yields 8%, and its par value is $100.
What is the stock's value? Round your answer to two decimal places.
Suppose interest rates rise and pull the preferred stock's yield up to 11%. What would be its new market value? Round your answer to two decimal places.
5.A stock is expected to pay a dividend of $1.00 the end of the year (that is, D1 = $1.00), and it should continue to grow at a constant rate of 6% a year. If its required return is 13%, what is the stock's expected price 4 years from today? Round your answer to two decimal places.
6.Microtech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Microtech to begin paying dividends, beginning with a dividend of $1.25 coming 3 years from today. The dividend should grow rapidly - at a rate of 35% per year - during Years 4 and 5; but after Year 5, growth should be a constant 9% per year. If the required return on Microtech is 16%, what is the value of the stock today?
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