A1412345678AWashington Inc. just paid a dividend of$2.15 per share on its stock. Thedividends are expected to grow at aconstant rate of 4% per yearindefinitely. If investors require a returno f10.5% on the company's stock, whatis the current price? What is the price inthree years? In fifteen years?DO910 G11 R12 P11314 P31516 P1517XV fx P31819202122$B2.154.0%10.5%$ 34.40D

Current Share Price: The price at which a share of stock or any other asset was last traded is…

Answered: 1 Washington Inc. just paid a dividend…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The RLX Company just paid a dividend of $2.60 per share on its stock. The dividends are expected to grow at a constant rate of 5.75 percent per year, indefinitely. Assume investors require a return of 12 percent on this stock. a. What is the current price? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. What will the price be in four years and in sixteen years? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. a. Current price b. Price in four years Price in sixteen years $ 43.99
Fowler, Inc., just paid a dividend of $2.40 per share on its stock. The dividends are expected to grow at a constant rate of 6.25 percent per year, indefinitely. Assume investors require a return of 12 percent on this stock. a. What is the current price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What will the price be in four years and in sixteen years? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) а. Current price b. Price in four years Price in sixteen years
● Suppose a firm is expected to increase dividends by 20% in one year and by 15% in two years. After that dividends will increase at a rate of 5% per year indefinitely. If the last dividend was $1 and ● the required return is 20%, what is the price of the stock? Remember that we have to find the PV of all expected future dividends. 7-22
Fowler, Inc., just paid a dividend of $3.20 per share on its stock. The dividends are expected to grow at a constant rate of 6.25 percent per year, indefinitely. Assume investors require a return of 12 percent on this stock. a. What is the current price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What will the price be in four years and in sixteen years? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Q5-2 MEGG Inc. just paid a dividend of $2.00 per share on its stock. The dividends are expected to grow at a constant 6 percent per year indefinitely. If investors require a 13 percent return on the stock, what is the current price? What will the price be in 3 years? In 15 years? Do g Ke Po #DIV/0! todays price What will the price be in? This is a dividend constant growth valuation problem. see text p. 209 for formula Po= end of year 3 D1 D2 $ $ D1 $ Price at the end of year 15 D2 D3 2.12 $ Ke is required return of investor g is the constant growth rate of dividends in perpetuity Do is the current dividend D3 $ 2.25 $ D4 2.38 $ Do*(1+g)/(Ke-g) 4 use the constant growth formula using D3 as the dividend to grow P3 P3= D3*(1+g)/(Ke-g) D5 $ 5 D6 6 D7 $ 7 D8 es 8 D9 $ 9 D10 $ 10 D11 11 D12 es 12 D13 $ 13 D14 14 15 D15 $ use the constant growth formula using D15 as the dividend to grow P15 P15= D15*(1+g)/(Ke-g)
The earnings of Eastern Corp. are expected to grow at an annual rate of 12% over the next 5 years and then slow to a constant rate of 8% per year. The company currently pays a dividend of $0.36 per share. What is the value of the company’s stock to an investor who requires a 14% rate of return? If the stock has a market price of $15, do you buy it ?
Walmart has just paid an annual dividend of $3.56. Dividends are expected to grow by 9% for the next 4 years, and then grow by 4% thereafter. Walmart has a required return of 9%. What is the expected dividend in four years? What is the terminal value in four years (P4)? What is the value of the stock now?
2. Intel just paid an annual dividend of $2 a share. Management estimates the dividend will increase by 10 percent a year for the next two years. After that, the dividend growth rate is estimated at 5 percent. The required rate of return is 12 percent. What is the value of this stock today?
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Suppose company Becker inc. has just paid a quarterly dividend of $2 per share, as it has for the previous 3 quarters. The management plans on raising this dividend by 3.6% per year indefinitely. If the required return on this stock is 10%, what is the current share price?
7. I need help with finance home work question asap please A company just paid a dividend of $4.15 per share. The company is expected to increase its dividend by 19% per year for each of the next 2 years and then maintain a constant dividend growth rate of 5% forever. What is this stock's expected price per share 2 years from now if the required return on this stock is 13.45%?

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1 Washington Inc. just paid a dividend of $2.15 per share on its stock. The dividends are expected to grow at a constant rate of 4% per year indefinitely. If investors require a return o f10.5% on the company's stock, what is the current price? What is the price in three years? In fifteen years?