A share just paid a dividend of... Please solve this financial accounting problem A share just paid a dividend of $0.30. Thedividend is expected to increase at an annualrate of 4% forever. If the required return is 10%,what is the fair value of this share today?a. $0.31b. $5.50c. $5.20d. $3.12e. $5

Step 1: Define Fair ValueThe value that represents a company's intrinsic value based on the…

Answered: A share just paid a dividend of $0.30.…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 2P

See similar textbooks

Similar questions

What is the fair value of this share today on these financial accounting question?
How much would you be prepared to pay for a share in two years' time when it begins to pay a $0.17 dividend each year and is currently priced at $3? Assume the required rate of return is 8.5% p.a.
A share is expected to pay an annual dividend of $1.93 next year, and this dividend is then expected to grow at a constant rate of 3% p.a. in perpetuity. If the required rate of return is 8% p.a., what is the value of the share?
An ordinary share currently pays a dividend of R2 for the year. Expected dividends growth is 20% for the next three years and then growth is expected to revert to 7% thereafter for an indefinite amount of time. The appropriate required rate of return is 15%. What is this ordinary share’s value?1. R33.892. R34.563. R36.934. R37.23
Most recent dividend (D0) paid $5.16, if anticipated growth of 4.8 % is expected to be constant into the future, what is the fair value of the stock if the required return (rs) = 13.8 percent? Answer to two decimal places.
stock X just paid a dividend of $1 and is expected to pay a $3 dividend per year for the foreseeable future. Given that the required rate of return on stock X is 5%, what would be the fair price of stock X 3 year from today? 1. $3.86 2. 4 3. 3.47 4. 4.86 5. 60
What is the answer a b c d ? General Accounting
Help
If the current year's dividend was $2 per share and all future dividends will decrease by 5% annually. What is the stock worth today at a required return of 15%?A. 9.5 B. 10C. 20
Provide answer
This year, Hope Corporation paid a dividend of $0.50 per share. The company expect dividends to increase by 4.5% each year forever. If investors require a return of 12%, what is the value of a Hope Corporation share today? a. $6.67 b. $6.97 c. $4.17 d. $7.47 e. $0.50
help this answer

SEE MORE QUESTIONS

Recommended textbooks for you

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning