Financial Accounting Question please answer fast A stock will not pay dividends until three years from now. Thedividend then will be $2.00 per share, the dividend payoutratio will be 40 percent, and return on equity will be 15percent. If the required rate of return is 12 percent, which ofthe following is closest to the value of the stock?a. $27.b. $33.c. $53.d. $67.

Step 1: Define Dividend Payout RatioThe dividend payout ratio depicts the value of the income the…

Answered: A stock will not pay dividends until…

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

A stock is trading at $80 per share. The stock is expected to have a yearend dividend of $4 per share (D1 = $4), and it is expected to grow at some constant rate, g, throughout time. The stock’s required rate of return is 14% (assume the market is in equilibrium with the required return equal to the expected return). What is your forecast of gL?
Crisp Cookware’s common stock is expected to pay a dividend of $3 a share at the end of this year (D1 = $3.00); its beta is 0.8. The risk-free rate is 5.2%, and the market risk premium is 6%. The dividend is expected to grow at some constant rate g, and the stock currently sells for $40 a share. Assuming the market is in equilibrium, what does the market believe will be the stock’s price at the end of 3 years (i.e., what is )?
A stock is expected to pay its first $0.8 dividend in 3 years from now (t=3). The dividend is expected to be paid annually forever and grow by 2% pa. The discount rate is 8% pa. Estimate what the stock price will be in 2.25 years from now. The stock price at time 2.25 is expected to be: Select one: a. $13.9408 b. $13.6675 c. $13.5924 d. $13.1368 e. $12.5855
A stock is expected to pay its first $2.9 dividend in 5 years from now (t=5). The dividend is expected to be paid annually forever and grow by -3% pa (note the negative sign). The discount rate is 7% pa. Estimate what the stock price will be in 5.25 years from now. The stock price at time 5.25 is expected to be: Select one: a. $29.4947 b. $29 c. $28.6099 d. $26.7382 e. $24.7144
A stock is expected to pay its first $640 dividend in 1 year from now. The dividend is expected to be paid annually forever and grow by -2% pa (note the negative sign). The discount rate is 4% pa. Estimate the current stock price. The current stock price should be: Select one: a. $16,000 b. $14,792.9 c. $11,306.67 d. $10,666.67 e. $10,256.41
need answer please
NoRagrets, Inc is expected to pay a dividend in year 1 of $2 and a dividend in year 2 of $2.40. After year 2, dividends are expected to grow at the rate of 6% per year. An appropriate required return for the stock is 9%. The stock should be worth today. Select one: O a. $73.37 O b. $79.63 O c. $67.32 O d. $73.21
EMKA corporation is going to pay a dividend of $1.5, $2, and $2.5 each year for the next three years. Afterwards, it is planing to increas the dividends at a constant rate of 10% indifinitely. How much should the stock be sold for if the required rate of return is 12%? Select one: a.$104.17 b.$102.59 c.$100.01 d.$105.64
A stock is expected to pay $0.80 per share every year indefinitely. If the current price of the stock is $18.90, and the equity cost of capital for the company that released the shares is 6.4%, what price would an investor be expected to pay per share five years into the future? OA. $22.90 OB. $21.23 OC. $20.43 O D. $22.65 O E. $12.50
provide ans..
A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is rs = 10.5%, and the expected constant growth rate is g = 9%. What is the stock's current price? Select the correct answer. a. $46.00 b. $48.00 c. $47.00 d. $50.00 e. $49.00
You are considering the purchase of a new stock. The stock is expected to grow at 2.52% for the foreseeable future and just paid a $2.88 dividend (D0). The required return is 8.2%. Based on this, what is the value of the stock? Round calculations to the nearest cent.

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

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Fundamentals Of Financial Management, Concise Edi…

Finance

ISBN:

9781337902571

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Fundamentals of Financial Management, Concise Edi…

Finance

ISBN:

9781285065137

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Fundamentals of Financial Management, Concise Edi…

Finance

ISBN:

9781305635937

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS