A stock is trading for a share price of $21.99. You expect it to pay a dividend of $1.58 exactly one year from now, and you expect future annualdividends to grow at 2.9% per year indefinitely. What is the stock's required rate of return? Enter your answer as a decimal and show fordecimal places. That is, if your answer is 12.5%, enter .1250.Type your answer...

Current price of stock is the price which can be paid for purchase of the stock. It is also called…

Answered: A stock is trading for a share price of…

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

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Similar questions

A stock is expected to pay a dividend of $1.00 at the end of the year (i.e., D1 = $1.00), and it should continue to grow at a constant rate of 5% a year. If its required return is 12%, what is the stock's expected price 4 years from today? Do not round intermediate calculations. Round your answer to the nearest cent. $
Stimpson Inc. preferred stock pays a $.50 annual dividend. What is the value of the stock if your required rate of return is .10? Instruction: Type your answer in dollars, and round to two decimal places
3) see picture
answer each component PLEASE.
Over the next year, Rush Valley Corp. stock has a 20% chance of returning -4%, a 50% chance of returning 10%, and a 30% chance of returning 17% Wat is Rush Valley Corp.'s expected return? Submit your answer as a percentage and round to two decimal places (Ex. 0.0000
A stock is selling today for $50 per share. At the end of the year, it pays a dividend of $3 per share and sells for $59. Required: a. What is the total rate of return on the stock? b. What are the dividend yield and percentage capital gain? c. Now suppose the year-end stock price after the dividend is paid is $44. What are the dividend yield and percentage capital gain in this case?
A stock is expected to pay a dividend next year of $2.3. The dividend amount is expected to grow at an annual rate of 5.1% indefinitely. Assuming a required return on the stock of 11.2% in the future, the dividend yield on the stock is ______%. Do not round any intermediate work, but round your final answer to 2 decimal places (ex: 12.34567% should be entered as 12.35).
An investor bought a stock for $18 (at t = 0) and one year later it paid a $2 dividend (at t = 1). Just after the dividend was paid, the stock price was $19 (at t = 1). Inflation over the past year (from t = 0 to t = 1) was 8% pa, given as an effective annual rate. Which of the following statements is NOT correct? All answer options are rounded to 6 decimal places. The stock investment produced a: Question 3 Select one: a. Nominal capital return of 5.555556% pa. b. Nominal total return of 16.666667% pa. c. Real capital return of 14% pa. d. Real income return of 10.288066% pa. e. Real total return of 8.024692% pa.
am. 118.
Trump corporation's stock sells for $45.30 and is expected to pay a dividend of 2.40 next year. Dividends are expected to grow at 0.02 percent into the foreseeable future. What is the expected dividend yield on Trump stock for the first year? Answer should be to 2 decimals---Ex: .04 Be sure to round properly. ex. .036 rounds to .04 and .042 rounds to .04 Your Answer: Answer
A stock just paid $2.7 dividend yesterday. The dividend is expected to grow at 3.4% per year thereafter. If the required rate of return of the stock is 10.5%, then using the dividend discount model, the stock price should be _______. (Round your answer to two decimal places, such as 12.34).
You observed that the most recent price of a stock was $50. If the stock's dividends are expected to grow at a constant rate of 6% per year, what is the estimated stock price in year 1 (i.e., P₁)? O $47.17 O $53.00 O $42.65 O $58.25

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