A firm recently paid a dividend of $1.75 per share. The dividend is expected to grow by 13% for the next 2 years. The dividend is expected to grow by a more modest 3.50% thereafter. What is the firm's stock value per share given a 6.95% discount rate? $58.61 ○ $62.41 $21.47 ○ $70.84
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- The Castle Company recently reported net profits after taxes of $15.8 million. It has 2.5 million shares of common stock outstanding and pays preferred dividends of $1 million a year. The company’s stock currently trades at $60 per share. Compute the stock’s earnings per share (EPS). What is the stock’s P/E ratio? Determine what the stock’s dividend yield would be if it paid $1.75 per share to common stockholders.Conroy Consulting Corporation (CCC) has a current dividend of D0 = $2.5. Shareholders require a 12% rate of return. Although the dividend has been growing at a rate of 30% per year in recent years, this growth rate is expected to last only for another 2 years (g0,1 = g1,2 = 30%). After Year 2, the growth rate will stabilize at gL = 7%. What is CCC’s stock worth today? What is the expected stock price at Year 1? What is the Year 1 expected (1) dividend yield, (2) capital gains yield, and (3) total return? What is its expected dividend yield for the second year? The expected capital gains yield? The expected total return?Assume that IWT has completed its IPO and has a $112.5 million capital budget planned for the coming year. You have determined that its present capital structure (80% equity and 20% debt) is optimal, and its net income is forecasted at $140 million. Use the residual distribution approach to determine IWT’s total dollar distribution. Assume for now that the distribution is in the form of a dividend. Suppose IWT has 100 million shares of stock outstanding. What is the forecasted dividend payout ratio? What is the forecasted dividend per share? What would happen to the payout ratio and DPS if net income were forecasted to decrease to $90 million? To increase to $160 million? In general terms, how would a change in investment opportunities affect the payout ratio under the residual distribution policy? What are the advantages and disadvantages of the residual policy? (Hint: Don’t neglect signaling and clientele effects.)
- A firm is expected to pay a dividend of $3.90 one year from now and $4.25 two years from now and $4.30 three years from now. The firm's stock price is expected to be $110.50 in four years. What is the firm's stock value using a 13.78% required return? ○ $75.56 $201.47 $73.36 ○ $65.93A company is expected to pay a dividend of $6.73 in the following period. If the expected growth rate of this dividend is 4.00% and the expected rate of return or discount rate for this stock is 11.00%, the current share price in dollars is closest to: O A. $99.99 O B. $61.18 O C. $96.14Francis Inc.'s stock has a required rate of return of 10.25%, and it sells for $87.50 per share. The dividend is expected to grow at a constant rate of 6.00% per year. What is the expected year-end dividend, D1? a. $2.79 O b. $4.65 O c. $3.72 O d. $3.90 Ое. $3.16
- The Belichick Hoodie Co. just paid a dividend of $3.96 per share on its stock. The dividends are expected to grow at a constant rate of 6.3 percent per year indefinitely. The current share price is $52.70. What is the company's dividend yield? Suggested Formula(s): Dividend yield = D:/Po Select one: OA 9.73% OB. 7.99% OC. 7.51% OD. 7.04% DE 9.34%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. $ 15.00A firm recently paid a $1.91 per share dividend. The dividend is expected to grow by 5.15% per year. At the current stock price of $13.50 per share, what is the return shareholders are expecting? 14.15% 14.88% 19.30% 20.03%
- J Pinkman Motors paid a dividend of $ 3.75 last year. If J Pinkmans return on equity is 24% and its retention rate is 25%, what is the value of the common stock if investors require a 20% rate of return? a. $ 38.39 b. $18.39 c. $82.39 d. $ 28.39A company has stock which costs $42.75 per share and pays a dividend of $2.70 per share this year. The company's cost of equity is 9%. What is the expected annual growth rate of the company's dividends? O A. 10.72% В. 5.36% С. 2.68% O D. 8.04%Suppose that a company's most recent dividends per share paid upon the last year's net income was $1.6 . The share price of the company is fairly valued in the market at $10 . The expected dividend growth rate is 2% in perpetuity. Given that the risk-free rate is 3% and market risk premium is 10%, what happens to the share prices when the whole market increases by 10%? a) increase by 15.32%b) increase by 15.00%c) increase by 11.79%d) increase by 21.89%e) other