CM Corp. just paid a dividend of $3.35. Dividends are expected to grow at 3% indefinitely. The required return for CM stock is 13%. What is the expected price of the stock?
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What is the expected price of the stock? General accounting
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- Please helpA stock pays annual dividends. It just paid a dividend of $6. The growth rate in the dividend is 2% pa. You estimate that the stock's required return is 10% pa. Both the discount rate and growth rate are given as effective annual rates. Which of the following statements is NOT correct? a. Total return of the stock is equal to the company's long term cost of equity. b. The share price at time t=0 is $75.00 c. The dividend at time t=3 will be $6.3672 d. Total return of the stock is equal to the dividend yield plus the capital return. e. The long-term capital return of the stock is 2%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 share of common stock just paid a dividend of $1.00. If the expected long-run growth rate for this stock is 5.4%, and if investors' required rate of return is 12.6%, then what is the stock price? Please explain and show calculations.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 $56. 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 $48. What are the dividend yield and percentage capital gain in this case? A Required What is the total rate of return for the stock? B Required What is the dividend yield and percentage capital gain? C Required Now suppose the year-end stock price after the dividend is paid is $48. What are the dividend yield and percentage capital gain in this case? (Negative amounts should be indicated by a minus sign. Enter your answers as a whole percent.)A share of Lash Inc.'s common stock just paid a dividend of $1.35. If the expected long-run growth rate for this stock is 3%, and if investors' required rate of return is 13%, what is the stock price?
- ABC Company is expected to pay $2.80 per share dividend at the end of the year (D1 = $2.80). The dividend is expected to grow at a constant rate of 5% per year. The required rate of return on the stock, rs is 9%. What is the stock’s current value per share? 2. Use the information from question 2 to calculate the following. You will need to also calculate the current stock price for year 2 in order to calculate each of these items. (hint: Use PowerPoint slide 14 as a guide): Dividend yield Capital gains yield Total return 3. ABC Company also has perpetual preferred stock outstanding that sells for $25 a share and pays a dividend of $3.00 at the end of each year. What is the required rate of return?A share of common stock just paid a dividend of $5. If the expected long-run growth rate for this stock is 2%, and if investors' required rate of return is 8.5%, then what is the stock price? Round your final answer to 2 decimal places. Do not round any intermediate calculation.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
- BioScience Inc. will pay a common stock dividend of $4.45 at the end of the year (D₁). The required return on common stock (x) is 16 percent. The firm has a constant growth rate (g) of 8 percent. Compute the current price of the stock (Po). (Do not round intermediate calculations. Round your answer to 2 decimal places.) Current priceThe RLX Company just paid a dividend of $3.20 per share on its stock. The dividends are expected to grow at a constant rate of 4 percent per year indefinitely. Investors require a return of 10.5 percent on the company's stock. a. What is the current stock price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What will the stock price be in 3 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What will the stock price be in 15 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Current price b. Stock price in 3 years c. Stock price in 15 yearsSuppose that you have just purchased a share of stock for $32. The most recent dividend was $2.2 and dividends are expected to grow at a rate of 4% indefinitely. What must your required return be on the stock?
