b. C. 1. Made-It, Inc., common stock currently sells for $22.50 per share. The company's executives paid a $2.00 dividend and anticipate a constant growth rate of 10% a. What is your expected return if you buy the common stock at the current market price of $22.50 per share? b. If you require a 17% return, what is the value of the common stock to you? c. Should you purchase the stock? Why? DO 6 01 Pps r bar DO B D1 r Vcs

b. C. 1. Made-It, Inc., common stock currently sells for $22.50 per share. The company's executives paid a $2.00 dividend and anticipate a constant growth rate of 10% a. What is your expected return if you buy the common stock at the current market price of $22.50 per share? b. If you require a 17% return, what is the value of the common stock to you? c. Should you purchase the stock? Why? DO 6 01 Pps r bar DO B D1 r Vcs

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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Stoneheart Group is expected to pay a dividend of $3.23 next year. The company's dividend growth rate is expected to be 3.6 percent indefinitely and investors require a return of 12 percent on the company's stock. What is the stock price? Multiple Choice. $26.92 $38.45 $36.53 $39.84 49421
Suppose you know that a company's stock currently sells for $45.85 per share and the required return on the stock is 6.48 percent. You also know that the total return on the stock is evenly divided between capital gains yield and dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share? Answer to two decimals.
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. $ 28.39
Jiffy Co. expects to pay a dividend of $3.00 per share in one year. The current price of Jiffy common stock is $60 per share. What is the cost of internal common equity (retained earnings) if the long-term growth in dividends is projected to be 9 percent indefinitely? a. 15 percent b. 14 percent c. 16 percent d. 13 percent
Assume that you are a consultant to Broske Inc., and you have been provided with the following data: the next expected dividend is $0.67; the current market price is $42.50 and the constant growth rate for the dividends is 8.00% Based on the information given what is the cost of equity?
1. The ABV Inc' current stock price is $50.00. The discount rate is 10%. The constant growth rate in dividends per share is 5%. If you buy a share of ABV Inc. at the current market price and hold it for at least 2 years. What do you expect the value of your dividend check to be 2 years from today? A. $1.45 B. $1.80 C. $2.63 D. $2.96 E. $3.25
Suppose you know that a company's stock currently sells for $53.47 per share and the required return on the stock is 8.5 percent. You also know that the total return on the stock is evenly divided between capital gains yield and dividend yield. If it's the company's policy to always maintaina constant growth rate in its dividends, what is the current dividend per share? Answer to two decimals.
1. The ABV Inc' current stock price is $50.00. The discount rate is 10%. The constant growth rate in dividends per share is 5%. If you buy a share of ABV Inc. at the current market price and hold it for at least 2 years. What do you expect the value of your dividend check to be 2 years from today? A. $1.45 B. $1.80 C. $263 D. $2.96 E. $3.25
Please answer questions 3/4 PLEASE ! The future earnings, dividends, and common stock price of Callahan Technologies Inc. are expected to grow 5% per year. Callahan's common stock currently sells for $24.00 per share; its last dividend was $1.80; and it will pay a $1.89 dividend at the end of the current year. Using the DCF approach, what is its cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. 12.88 % If the firm's beta is 1.8, the risk-free rate is 4%, and the average return on the market is 14%, what will be the firm's cost of common equity using the CAPM approach? Round your answer to two decimal places. 22 % If the firm's bonds earn a return of 12%, based on the bond-yield-plus-risk-premium approach, what will be rs? Use the judgmental risk premium of 4% in your calculations. Round your answer to two decimal places. % 16.96? If you have equal confidence in the inputs used for the three approaches, what is your…
Allstate Corp (ALL) recently paid a dividend of $5.51. The required rate of return is 6.97%. Other things held constant, what would the stock’s price be if the growth rate was 2.75%? A. $104.57 B. $134.16 C. $149.88 D. $179.85
(Common stock valuation) Wayne, Inc.'s outstanding common stock is currently selling in the market for $24. Dividends of $3.01 per share were paid last year, return on equity is 21 percent, and its retention rate is 24 percent. a. What is the value of the stock to you, given a required rate of return of 19 percent? b. Should you purchase this stock? Question content area bottom Part 1 a. Given a required rate of return of 19 percent, the value of the stock to you is $enter your response here. (Round to the nearest cent.)
Ay 3. The Tribiani Company just issued a dividend of $2.20 per share on its common stock. The company is expected to maintain a constant 6 percent growth rate in its dividends indefinitely. If the stock sells for $44.00 a share, what is the company’s cost of equity?

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