A firm pays a $4.80 dividend at the end of year one, has a stock price of $124, and has a constant growth rate of 5 percent. Compute the required rate of return.
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- A firm currently pays a dividend of $3.50, the stock price is $65 and a constant growth rate of 6 percent. Compute the required rate of return.A firm will start paying dividend of $3 per year from year-3. The return on equity is 15% and the pay-out ratio is 60%. If the investors required rate of return is 20% compute the current price of Stock. a. $ 20.00 b. $ 21.43 C. $ 14.88 d. $ 15.00Suppose a company just paid dividnd of $2.19.The dividend is expected to grow at 5.99% each year. If the stock is currently selling for $102.09, what is the requird rate of return o the stock?
- A firm has an expected dividend next year of $1.20 per share, a zerogrowth rate of dividends, and a required return of 10 percent. The value of a share of the firm's common stock isA firm pays a current dividend of $2, which is expected to grow at a rate of 3% indefinitely. If the current value of the firm’s shares is $25, what is the required return applicable to the investment based on the constant-growth model?You observe a stock price of $17. You expect a dividend growth rate of 5% and the next year's dividend was $1.70. What is the required return?A. 14.5%B. 15%C. 15.5%
- Assume that a share of stock has just paid an annual dividend of $3.00 (Do), and that this dividend is expected to grow by $0.07 in each future year (i.e., $3.07 in Year 1, $3.14 in Year 2, $3.21 in Year 3, etc.). Also assume that investors require a 15.0 percent rate of return. Given this information, and using the Banko growth model, determine what the current price of this stock should be. Answer in XX.XX format, with no dollar sign. For example, if your answer is $18.29, enter "18.29".Please helpHighGrowth Company has a stock price of $18. The firm will pay a dividend next year of $1.15, and its dividend is expected to grow at a rate of 3.5% per year thereafter. What is your estimate of HighGrowth's cost of equity capital? The required return (cost of capital) of levered equity is%. (Round to one decimal place.)
- 33. A firm pays a $1.50 dividend at the end of year 1 (D,), has a stock price of $155 (Po), and a constant growth rate (g) of 10 percent. Compute the required rate of return (K.). Indicate whether each of the following changes would make the required rate of return (K.) go up or down. (Each question is separate from the others. That is, assume only one variable changes at a time.) No actual numbers are a. necessary. b. The dividend payment increases. The expected growth rate increases. d. The stock price increases. C.A firm will pay a dividend of $1.05 next year. The dividend is expected to grow at a constant rate of 3.42% forever and the required rate of return is 13.83%. What is the value of the stock?Estimate the cost of equity if the share price is $50, the nextt annual dividend is expected to be $1, and the expected growth rate for dividends is 5% per year.
