so.5 2. Exxon's dividends are expected to grow at a rate of 15% during the next two years, 10 % in the third year, and at a constant rate of 5% thereafter, Exxon's last dividend, which has just been paid, was $2.00. If the required rate of return on the stock is 12%, what would be the price of thestock in one year (P1) ?↓Do(1) $37,47(2) $38,47(3) $39,47(4) $40,47(5) $41,47

Where,P0 = Stock valueD0 = Current dividendg = growth rate in decimal format D0 ( 1 + g) =Expected…

Answered: 2. Exxon's dividends are expected to…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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If the last dividend paid by Chemical Brothers Inc. was $1.25 and analysts expect these payments to increase 4% per year, what will the stock price be next year if the required return is 15%? Select one: O a. $12.29 O b. $11.82 O c. $31.25 O d. $12.78 O e. $23.11
The RLX Company just paid a dividend of $315 por share on its stock. The dividends are expected to grow at a constant rate of 6 percent per year, indefinitely Assume investors require a return of 11 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 three years and in fifteen 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 three years Price in fifteen years
Answer C and D correctly!
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
Target Corporation (TGT) just paid a $3.14 dividend, and it is expected to grow at 6.25% for the next 3 years. After 3 years the dividend is expected to grow at the rate of 2.95% indefinitely. If the required return is 7.12%, what is the stock’s value today? A. $61.67 B. $70.95 C. $84.97 D. $98.04
Fowler, Inc., just paid a dividend of $2.90 per share on its stock. The dividends are expected to grow at a constant rate of 4.75 percent per year, indefinitely. Assume investors require a return of 9 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 six years and in thirteen years? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) a. Current price b. Price in six years Price in thirteen years
Orwell building supplies' last dividend was $1.75. Its dividend growth rate is expected to be constant at 45.00% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its required return (rs) is 12%. What is the best estimate of the current stock price? Select the correct answer. a. $60.10 b. $58.56 c. $57.02 d. $59.33 e. $57.79
Please choose the correct answer
The Fl Corporation's dividends per share are expected to grow indefinitely by 8% per year. Required: a. If this year's year-end dividend is $3.00 and the market capitalization rate is 10% per year, what must the current stock price be according to the DDM? Note: Round your answer to 2 decimal places. b. If the expected earnings per share are $9.00, what is the implied value of the ROE on future investment opportunities? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. c. How much is the market paying per share for growth opportunities (i.e., for an ROE on future investments that exceeds the market capitalization rate)? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. a. Current stock price b. Value of ROE c. Amount % per share
A company is currently paying dividend of Tk. 40 per share. The dividend is expected to grow at a 20% annual rate for two years, then at 15% rate for the next two years and then at 10% rate for the next two years, after which it is expected to grow at a 5% rate forever. What should be the current price of the share if required rate of return is 12%? (Consider upto 3 decimal placein case of all fractions).
Orwell Building Supplies' last dividend was $1.75. Its dividend growth rate is expected to be constant at 25% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its required return (rs) is 12%. What is the best estimate of the current stock price? a. $41.58 b. $42.64 c. $43.71 d. $44.80 e. $45.92 What is the capital gains yield in the first year for Orwell Building Supplies using the information from the previous question? a. 8.33%. b. 6.87%. c. 12.00%. d. 6.00%. e. 8.00%.
H5.

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