HighGrowth Company has a stock price of $21. The firm will pay a dividend next year of $0.86, and its dividend isexpected to grow at a rate of 3.5% per year thereafter. What is your estimate of High Growth's cost of equity capital?The required return (cost of capital) of levered equity is %. (Round to one decimal place.)

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Answered: HighGrowth Company has a stock price of…

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 16MC

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HighGrowth Company has a stock price of $20. The firm will pay a dividend next year of $1.03, and its dividend is expected to grow at a rate of 3.6% per year thereafter. What is your estimate of HighGrowth's cost of equity capital? The required return (cost of capital) of levered equity is __ % ? (Round to one decimal place.)
Slow 'n Steady, Inc., has a stock price of $28, will pay a dividend next year of $3.10, and has expected dividend growth of 1.7% per year. What is your estimate of Slow 'n Steady's cost of equity capital? The required return (cost of capital) of levered equity is __ % ? (Round to one decimal place.)
2. HighGrowth Company has a stock price of $19. The firm will pay a dividend next year of $0.88, and its dividend is expected to grow at a rate of 4.1% per year thereafter. What is your estimate of HighGrowth's cost of equity capital? The required return (cost of capital) of levered equity is ____%. (Round to one decimal place.)
Krell Industries has a share price of $21.55 today. If Krell is expected to pay a dividend of $1.08 this year and its stock price is expected to grow to $24.57 at the end of the year. The dividend yeild is? (Round to one decimal place)The capital rate gain is? (Round to one decimal place)The total return is? (Round to one decimal place)
Krell Industries has a share price of $21.92 today. If Krell is expected to pay a dividend of $1.11 this year and its stock price is expected to grow to $24.16 at the end of the year, what is Krell's dividend yield and equity cost of capital? The dividend yield is %. (Round to one decimal place.) %. (Round to one decimal place.) The total return is %. (Round to one decimal place.) The capital gain rate is
HighGrowth Company has a stock price of $20. The firm will pay a dividend next year of $1, and its dividend is expected to grow at a rate of 4% per year thereafter. What is your estimate of HighGrowth’s cost of equity capital?
Next year, BHH Co. is expected to pay a dividend of $3.12 per share from earnings of $4.98 per share. The equity cost of capital for BHH is 12.3%. What should BHH's forward P/E ratio be if its dividend growth rate is expected to be 4.2% for the foreseeable future? The forward P/E ratio is (Round to two decimal places.)
i need the answer quickly
BM expects to pay a dividend of $8 next year and expects these dividends to grow at 3.15% a year. The price of IBM is $67 per share. What is IBM's cost of equity capital?
Suppose a firm just paid a dividend of $1.00. You expect that the firm will grow at 30% next year, 10% the following year, and at a constant rate of 2% thereafter. The required return on this firm's equity is 14%. What is the price of the stock? Note: Show your answer in units of dollars, use plain numbers with at least two digits after the decimal (e.g., for $12,345.67, type 12345.67).
Chelsea Fashions is expected to pay an annual dividend of $0.80 a share next year. Themarket price of the stock is $22.40 and the growth rate is 5 percent. What is the firm's cost of equity?
you expect kt industries (kti) will have earnings per share of $4.6 this year and expect that they will pay out $1.59 of these earnings to shareholders in the form of a dividend. kti's return on new investments is 10%, and their equity cost of capital is 16%. ... kti's dividend growth rate is % (round to two decimal places) if kti's dividend growth rate will remain constant, and kti's next year dividend is $1.69. then kti's current stock price should be $ (round to two decimal places)

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