4. Mouser Industries' common stock paid $1.32 in dividend last year, and is expected to grow at anannual rate of 7% for the near future. What is the value of the stock if the current rate of return is 11%

As per the Constant Dividend growth model,Value of the stock = D0 x (1+g) / (r - g)whereD0 = Recent…

Answered: 4. Mouser Industries' common stock paid…

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

See similar textbooks

Similar questions

What is the intrinsic value of a stock which last paid a dividend of $3.25 and is expected to grow at 17% over the next 2 years after which it will settle down at a stable rate of 8% per annum? The investor’s required rate of return is 12.5%.
The last dividend paid by ABC company is $8. The dividendis expected to grow by 5% next year, 4% in the second year, 5% in third year and 3% in the following years. If expected return rate of investors is 14%, what is the value of this stock today ?
Suppose your company is expected to grow at a constant rate of 4 percent long into the future. In addition, its dividend yield is expected to be 7 percent. If your company expects to pay a dividend equal to $1.62 per share at the end of the year, what is the value of your firm's stock? Round your answer to the nearest cent.
A stock pays a yearly dividend of $2.16, expected to grow by 0.4% per year forever. If the stock is currently priced at $27.26, what is the prevailing market rate of return?
A stock just paid an annual dividend of $6.1. The dividend is expected to grow by 3% per year for the next 4 years. In 4 years, the P/E ratio is expected to be 14 and the payout ratio to be 60%. The required rate of return is 8%. What is the value of the stock?
Lucky Star Berhad has just paid RM0.50 annual dividend. The dividend is expected to increase by 12 percent for the next two years and another 10 percent for the subsequent two years. Afterwards, a more stable 7 percent growth rate can be assumed. Calculate the value of this stock if the required rate of return is 10 percent.
1.If a stock pays a Tk.6 dividend this year, and the dividend has been growing 4%annually, then what will be the intrinsic value of the stock, assuming a requiredrate of return of 11%?
The last dividend paid by ABC company is 2 TL. The dividend is expected to grow by 5% next year, 4% in the second year and 3% in the third year. Then, the dividend will grow steadily by 2%. If the expected return rate of investors (k) is 14%, what is the value of this stock today (P0)?
A company's common stock currently sells for $27.27 per share. The dividend is projected to increase at a constant rate of 7.75% per year. The required rate of return on the common stock is 11.5%. What is the stock's expected price per share 5 years from today?
New England Electric has projected dividends of $2.72 in one year and $3.10 in two years. If the stock is projected to sell for $48.00 in two years, what is the value of the stock today if the required return is 10 %?
Francis Inc.'s stock has a required rate of return of 9.25%, and it sells for $70 per share. The dividend is expected to grow at a constant rate of 5.00% per year. What is the expected year-end dividend, D1?
Analysts project that dividends for Industrial Amalgamated will be $2.00 per share next year and are expected to grow at 2.1% per year indefinately. If investor's have a required return of 8.5%, how much should the stock sell for?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS

4. Mouser Industries' common stock paid $1.32 in dividend last year, and is expected to grow at an annual rate of 7% for the near future. What is the value of the stock if the current rate of return is 11%