A corporation pays a dividend of $0.75 per year, and it's equity cost of capital is 14%. If the dividends continue indefinitely, what is the value of the company stock?
Q: Anle Corporation has a current stock price of $21.38 and is expected to pay a dividend of $1.00 in…
A: Current price per stock = p0 = $21.38Next Year expected Dividend per share = d1 = $1Next Year price…
Q: NoGrowth Corporation currently pays a dividend of $2.08 per year, and it will continue to pay this…
A: Cost of Equity: It is the cost of the company while raising finance by issuing equity. It is…
Q: A business’s ordinary shares are currently trading at £4.00 (ex dividend) each in the capital…
A: Given the following information: Price of shares: $4 per share Next year's dividend: $0.22 per…
Q: Valiant Corp. pays a dividend of $2.5 per share and is expected to pay this amount indefinitely. If…
A: An important financial term is the cost of capital, this shows the costs a business must pay to…
Q: Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $2.55 next year. The growth…
A: Current Share Price: The current price is sometimes referred to as the market value. When a share of…
Q: Krell Industries has a share price of $22.32 today. If Krell is expected to pay a dividend of $1.07…
A: Current stock price (P0) = $22.32 Expected dividend (D1) = $1.07 Price after 1 years (P1) = $23.71
Q: NoGrowth Corporation currently pays a dividend of $0.56 per quarter, and it will continue to pay…
A: Given: Dividend = $0.56 Equity cost of capital = 13.6%
Q: Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $2.35 next year. The growth…
A: Stock price can be computed as follows: Price=DividendRequired return-Growth rate
Q: A corporation pays a dividend of $2.65 per year, and it’s equity cost of capital is 12%. If the…
A: Dividend = $2.65Discount Rate (Equity Cost of Capital) = 12% = 0.12
Q: A company pays a current dividend of $1.20 per share of common stock. The annual dividend will…
A: Capital gain means the increase in price of security during the holding period. But if the security…
Q: A corporation pays a dividend of $0.95 per year, and it’s equity cost of capital is 15%. If the…
A: The value of a stock can be determined using the Gordon Growth Model, which is a method for valuing…
Q: NoGrowth Corporation currently pays a dividend of $2 per year, and it will continue to pay this…
A: Cost of equity: The cost of equity is the minimum rate of return that an investor expects while…
Q: Krell Industries has a share price of $22.53 today. If Krell is expected to pay a dividend of $0.92…
A: According to the values provided in the question: p0=$22.53d1=$0.92p1=$24.43
Q: Anle's Corporation has a current price of $12, is expected to pay a dividend of $1 in one year, and…
A: Dividend yield can be calculated by using formula below.Dividend yield = Dividend/ current stock…
Q: Anle Corporation has a current stock price of $19.71 and is expected to pay a dividend of $0.95 in…
A: Corporate entities expect to distribute profits to shareholders in return for dividends. The value…
Q: Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $2.35 next year. The growth…
A: The following formula will be used:
Q: NoGrowth Corporation currently pays a dividend of $0.59 per quarter, and it will continue to pay…
A: Solution:- Cost of equity means the rate of return on investment required by the equity…
Q: Anle Corporation has a current stock price of $15.42 and is expected to pay a dividend of $0.85 in…
A: As per the given information:
Q: Krell Industries has a share price of $21.35 today. If Krell is expected to pay a dividend of $ 0.61…
A: A capital is a broad term known as cash or liquid asset, that has monetary value. It is the…
Q: Red, Incorporated, Yellow Corporation, and Blue Company each will pay a dividend of $1.50 next year.…
A: As the growth rate is constant and lower than the required return, we can apply the constant…
Q: Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $2.50 next year. The growth…
A: The share price is the current market price of the share. It is the price of the share at any…
Q: NoGrowth Corporation currently pays a dividend of $2.00 per year, and it will continue to pay this…
A: Cost of Equity: It is the cost of the company while raising finance by issuing equity. It is…
Q: Anle Corporation has a current price of $16, is expected to pay a dividend of $1 in one year, and…
A: Expected dividend yield is calculated below:Expected dividend yield = Dividend/ Current stock price…
Q: Krell Industries has a share price of $22.35 today. If Krell is expected to pay a dividend of $0.84…
A: The equity cost of capital is the cost of acquiring a stake in a corporation. It is the return you…
Q: What is the price per share of NoGrowth stock if the firm's equity cost of capital is 17.49% ?
A: The dividend growth model is a method for estimating the value of a company's stock based on the…
Q: NoGrowth Corporation currently pays a dividend of $2.24 per year, and it will continue to pay this…
A: Price per share is present value of dividends
Q: Anle Corporation has a current price of $13, is expected to pay a dividend of $2 in one year, and…
A: Answer: 1. Calculation of Anle's expected dividend yield: Formula, Expected dividend yield =…
Q: Anle Corporation has a current stock price of $21.99 and is expected to pay a dividend of $1.00 in…
A: As per the given information:
Q: Anle Corporation has a current stock price of $19.63 and is expected to pay a dividend of $0.75 in…
A: Given, Stock price after paying dividend (P1) = $21.45 Dividend (D) = $0.75 Current stock price (P0)…
Q: NoGrowth Corporation currently pays a dividend of $1.72 per year, and it will continue to pay this…
A: Solution:- Companies pay a part of their earnings to shareholders, which is known as dividend.…
Q: Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $4.15 next year. The growth…
A: The dividend discount model states that the dividends that are paid by a company are good indicators…
Q: Anle Corporation has a current stock price of $19.49 and is expected to pay a dividend of $1.25 in…
A: Equity cost of capital = (Expected stock price after dividend + Dividend - Current stock price) /…
Step by step
Solved in 3 steps
- NoGrowth Corporation currently pays a dividend of $1.72 per year, and it will continue to pay this dividend forever. What is the price per share if its equity cost of capital is 12% per year?Anle Corporation has a current stock price of $21.99 and is expected to pay a dividend of $1.00 in one year. Its expected stock price right after paying that dividend is $23.92. a. What is Anle's equity cost of capital? b. How much of Anle's equity cost of capital is expected to be satisfied by dividend yield and how much by capital gain? a. What is Anle's equity cost of capital? Anle's equity cost of capital is ☐ %. (Round to two decimal places.)One way to find the value of a share of a stock of a company is to assume the present value of a company is the present value of its projected income stream. The value of each share of stock is equal to the present value of the company divided by the number of shares. For example, if the present value of a company is $10,000 and there are 50 shares of stock, then each share has a present value of $10,000/50-$200. Find the value of each share of a company with 1250 shares if the company is expected to earn $400,00000 per year, I years from now, forever. Assume that the income stream is continuous, and that the continuous interest rate is 5% per year. Round your answer to three decimal places. Value of one share - $ Save for Later Attempts: 0 of 10 used. Submit Answer Q FO M Q Ma Q Ma Qu Ma Vie
- NoGrowth Corporation currently pays a dividend of $2 per year, and it will continue to pay this dividend forever. What is the price per share if its equity cost of capital is 15% per year?Anle Corporation has a current stock price of $21.38 and is expected to pay a dividend of $1.00 in one year. Its expected stock price right after paying that dividend is $23.19. a. What is Anle's equity cost of capital? b. How much of Anle's equity cost of capital is expected to be satisfied by dividend yield and how much by capital gain? a. What is Anle's equity cost of capital? Anle's equity cost of capital is%. (Round to two decimal places.) LEEDA stock is bought for $25.84 and sold for $26.44 a year later, immediately after it has paid a dividend of $4.59. What is the capital gain rate for this transaction?
- NoGrowth Corporation currently pays a dividend of $2.08 per year, and it will continue to pay this dividend forever. What is the price per share if its equity cost of capital is 14% per year? The price per share if its equity cost of capital is 14% per year is $_______ (Round to the nearest cent.)Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $4.15 next year. The growth rate in dividends for all three companies is 4 percent. The required return for each company’s stock is 8 percent, 11 percent, and 14 percent, respectively. What is the stock price for each company? What do you conclude about the relationship between the required return and the stock price?Anle Corporation has a current stock price of $19.71 and is expected to pay a dividend of $0.95 in one year. Its expected stock price right after paying that dividend is $21.84. a. What is Anle's equity cost of capital? b. How much of Anle's equity cost of capital is expected to be satisfied by dividend yield and how much by capital gain? a. What is Anle's equity cost of capital? Anle's equity cost of capital is %. (Round to two decimal places.) b. How much of Anle's equity cost of capital is expected to be satisfied by dividend yield and how much by capital gain? The dividend yield is%. (Round to two decimal places.) The capital gain is%. (Round to two decimal places.)
- NoGrowth Corporation currently pays a dividend of $0.56 per quarter, and it will continue to pay this dividend forever. What is the price per share of NoGrowth stock if the firm's equity cost of capital is 13.6%?NoGrowth Corporation currently pays a dividend of $0.45 per quarter, and it will continue to pay this dividend forever. What is the price per share of NoGrowth stock if the firm's equity cost of capital is 17.49% ?The Moreau Corporation is paying an annual dividend of $0.65 per share. If the price of a share of the stock is $81.25, what is the dividend yield on the stock?
