4. (Expected price) The shares of Misheak Inc., are expected to generate the following possible returnsover the next 12 months:Return (%) Probability-50.10.25100.30150.25250.1If the stock is currently trading at $25 per share, what is the expected price in one year? Assume thatthe stock pays no dividends.

The expected return over the next 12 months is calculated as =−0.05 × 0.10 + 0.05 × 0.25 + 0.10 ×…

Answered: 4. (Expected price) The shares of…

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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A share of stock pays a constantly growing (end-of-the-year) dividend. If the stock sells for $73.31/share today, the dividend to be paid in exactly one year (at t=1) is $2.61, and the total return required by investors (in the stock) is 13.09%, at what price should each share sell in exactly 4 years (at t=4)?
A stock is expected to pay a dividend next year of $2.1. The dividend amount is expected to grow at an annual rate of 6.9% indefinitely. Assuming a required return on the stock of 10.8% in the future, the dividend yield on the stock is %. Margin of error for correct responses: +/- .05 Rounding and Formatting instructions: Do not enter dollar signs, percent signs, commas, X, or any words in your response. Do not round any intermediate work, but round your *final* response to 2 decimal places (example: if your answer is 12.3456, 12.3456%, or $12.3456, you should enter 12.35).
Muller's Investigative Services has stock is trading at $45 per share. The stock is expected to have a year-end dividend of $3 per share (D₁ = $3), and it is expected to grow at some constant rate, g₁, throughout time. The stock's required rate of return is 12% (assume the market is in equilibrium with the required return equal to the expected return). What is your forecast of g₁? Do not round intermediate calculations. Round the answer to two decimal places
A stock you are interested in paid a dividend of $1 last year. The anticipated growth rate in What is the price of a $60 strike put? Assume S = $63.75, σ = 0.20, r = 0.055, the stock pays no dividend and the option expires in 50 days? and earnings is 25% for the next 2 years before settling down to a constant 5% growth rate. The discount rate is 12%. Calculate the expected price of
Am. 114.
The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.20 per share on its stock. The dividends are expected to grow at a constant rate of 4 percent per year indefinitely. Investors require a return of 10 percent on the company's stock. a. What is the current stock price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What will the stock price be in 3 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What will the stock price be in 10 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Required: A share of stock is now selling for $75. It will pay a dividend of $6 per share at the end of the year. Its beta is 10. What must investors expect the stock to sell for at the end of the year? Assume the risk-free rate is 5% and the expected rate of return on the market is 13% (Round your answer to 2 decimal places) Answer is complete but not entirely correct. $ 80.00 Ⓒ
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
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

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