29. Orange Systems stock currently sells for $50.00 per share. The dividend is projected to increase at a constant rate of 50% per year. The required rate of return on the stock, rs, is 9.00%. What is the stock's expected price 3 years from wday? a. $71.04 b. $71.63 c. $58.71 d. $68.69 e. $61.65 Page 8

29. Orange Systems stock currently sells for $50.00 per share. The dividend is projected to increase at a constant rate of 50% per year. The required rate of return on the stock, rs, is 9.00%. What is the stock's expected price 3 years from wday? a. $71.04 b. $71.63 c. $58.71 d. $68.69 e. $61.65 Page 8

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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Similar questions

H the expected dividend on a share of stock is $1 next year thedividends are expected to grow at a 5% rate per annum indefinitelyand ihe siock currently selling for $14.29 what is the approximateTerum required by the stockholders?a. 21% pa b. 12% pa C. 12% pa
Solve for the stock price, P0, using the following information: D1: $3.31 D2: $3.94 D3: $4.76 D4: $5.17 After year 4, dividends will grow at a constant 4% per year. The required return on the stock, rS, is 12% per year.
1. Problem 9.02 (Constant Growth Valuation) Tresnan Brothers is expected to pay a \$3.30 per share dividend at the end of the year(1.e.D1=53.20). The dividend is expected to grow at a constant rate of 94 a year. The required rate of tetura on the stock,fmis16%. What is the stock's current value per share? Round vour answer to the nearest cent.
The expected dividends of Northwestern Mutual are now $10, $37, -$22, $17, and $133 in the following 5 years. What is the present value of the stock? Assume that its discount rate is 4.14%. A. $104.57 B. $147.28 C. $180.85 D. $200.75
4.StockA sells for $40 a share. Its likely dividend payout and end-of-year price depend on the state of the economy by the end of the year as follows: Probability Stock Price Boom $50 Normal economy 42 Recession 30 50% 30% 20% Dividend $2.00 1.00 0.50 a.Calculate the expected holding-period return and standard deviation of the holding period return. b.Calculate the expected return and standard deviation of a portfolio invested half in this stock and half in Treasury bills. The return on bills is 4%.
1. Stock Values Fowler, Inc., just paid a dividend of $2.55 per share on its LO 1 stock. The dividends are expected to grow at a constant rate of 3.9 petcon per year, indefinitely. If investors require a return of 10.4 percent on this stock, what is the current price? What will the price be in 3 years? m 15 years? LO 1 2. Stock Values The next dividend navment by Hoffman Inc will be $2.65
12
Henebry Co.'s stock price is $60 per share, and its expected year - end dividend is $4.20 a share (D1 = $4.20). The stock's required return is 9%, and the dividend is expected to grow at a constant rate forever. What is the expected price of the stock 6 years from now? a. $63.67 b. $64.95 c. $ 66.24 d. $67.57 e. $68.92
F1
1. A stock price is currently $50 and it follows geometric Brownian motion with an expected return of 10% and volatility of 25% per year. The probability that the stock price at the end of 9 months will be greater than or equal to $60 is closest to: a. 0.6037 b. 0.2245 c. 0.2730 d. 0.7755
ABC common stock is expected to pay a dividend of $3 a share at the end of the year; the required rate of return is 10%. The dividend is expected to grow at some constant rate g, and the stock currently sells for $100 a share. Assuming the market is in equilibrium, the stock's price at the end of year 5 will be $_______. $60.83 $140.26 $54.12 $115.43
Suppose Barclay Corp is expected to pay a dividend of $2.50 at the end of the year. f the company and its dividends are growing at a relatively constant rate of 3.5% and Investors required return on the stock is 10.2%, what is the value of the stock? O$37.31 O $24.47 O$25.37 O $24.51 O$38.62 Page 13 of 30 Previous Page Next Page 0gf30.guestions.saved.

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