IBM expects to pay a dividend of $4 next year and expects these dividends to grow at 7% a year. The price of IBM is $90 per share. What is IBM's cost of equity capital? A. 9.65% B. 10.23% C. 12.36% D. 11.44% E. 10.89%

Q: Alibaba Group has a share price of $25 today. If Alibaba Group is expected to pay a dividend of…

A: Given Information :  Current Share Price = $25 Expected Dividend Per Share = $0.75  Growth in stock…

Q: Assume Gillette Corporation will pay an annual dividend of $0.66 one year from now. Analysts expect…

A: Dividend for year 1 is given = $0.66 Now we will calculate dividends from year 2 to year 6 growing…

Q: 4. You expect RMT company will have earnings per share of AED 10 this year and expect that they will…

A: Dividend is the part or share of profits being distributed to the shareholders. Dividend growth rate…

Q: 6. Nielson Motors has a share price of $25 today. If Nielson Motors is expected to pay a dividend of…

A: 1) Dividend Yield Dividend yield = Dividend /Current share price = 0.75/ 25 =  3.0%

Q: b) Lanigan bank is funded 100% by equity. Last year's dividend was £2.60. The bank expects to be…

A: Step 1: Given Value for Calculation last year dividend = d = $2.60Growth rate = g = 2%Expected Rate…

Q: IBM expects to pay a dividend of $6 next year and expects these dividends to grow at 3.92% a year.…

A: Cost of equity by dividend growth model: Cost of equity = D1/P0 + g D1 is expected dividend P0 is…

Q: Calculate the cost of capital for a new common stock issue by a firm that paid a $1.80 dividend last…

A: Current dividend = d0 = $1.80 Growth rate = g = 7% Price of common stock = p = $30

Q: you expect kt industries (kti) will have earnings per share of $4.6 this year and expect that they…

A: Growth rate can be calculated by multiplying the return on equity (ROE) with retention ratio.Growth…

Q: CleanClothes Corp. growing quickly. Dividends are expected to grow at a 19 percent rate for the next…

A: The dividend growth model is a method of evaluating a company's stock that does not take into…

Q: A company’s common stock is currently selling at $40 per share. Its most recent dividend was $1.60,…

A: Cost of retained earnings is calculated by dividend growth model. Last dividend paid = 1.6 growth…

Q: IBM expects to pay a dividend of $2 next year and expects these dividends to grow at 8% a year. The…

A: To Find: Cost of equity capital

Q: Summit Systems will pay a dividend of $1.61 this year. If you expect Summit's dividend to grow by…

A: Price per share is calculated using following equationPrice per share = Where, D1 is expected…

Q: Summit Systems will pay a dividend of $1.45 this year. If you expect Summit's dividend to grow by…

A: The Gordon Growth Model is a financial valuation model used to estimate the price per share of a…

Q: Summit Systems will pay a dividend of $1.48 this year. If you expect​ Summit's dividend to grow by…

A: Expected dividend (D1) = $1.48 Growth rate (g) = 5.3% Cost of capital (r) = 10.7%

Q: What is the debt ratio at the optimal capital structure of XYZ Inc.?

A: Capital structure which maximizes the share price is the optimal one. Let D1 = Expected dividend…

Q: KFC is expected to have earnings per share of $4 this year and expect that they will pay out $1.50…

A: The expected growth rate can be referred to as the return expected by the investors from an…

Q: Krell Industries has a share price of $22.58 today. If Krell is expected to pay a dividend of $0.87…

A: Dividend yield, capital gain and return on investment are all financial ratios an investor would…

Q: Summit Systems will pay an annual dividend of $1.48 this year. If you expect Summit's dividend to…

A: Next year dividend (D1) = $1.48Growth rate (g) = 0.053Equity cost of capital (r) = 0.116Price per…

Q: A firm will pay an annual dividend of $6 on its common stock in one year, and its dividend will grow…

A: Next dividend (D1) = $6 Growth rate = g Stock price (P0) = $88 Cost of equity (r) = 12%

Q: Summit Systems will pay a dividend of $1.61 this year. If you expect Summit's dividend to grow by…

A: Price per share is calculated using following equation Price per share = D1r-g Where, D1 is expected…

Q: If Microsoft's common stock is currently trading at $52.50 per share, and the company is expected to…

A: The cost of capital is the cost of obtaining funds from the public, and from an investor's point of…

Q: A company is expected to pay a dividend of $2 per share at the end of year 1, and it is expected to…

A: When the company receives profits and distributes them among the shareholders. That share of profit…

Q: Steady Company pays annual dividends and just paid a dividend of $1.00. You assume Steady Company’s…

A: Here,Current Dividend (D0) is $1.00Constant Growth Rate (g) is 15%Required Return (r) is 10%

Q: Suppose Microsoft Co. will pay a dividend of $1.9 per share one year from now (year 1), and $3.8 per…

A: The Dividend Discount Model (DDM) is a technique utilized to assess the underlying worth of a stock…

Q: If AT&T is expected to grow it's dividend by 1% per year after paying $1.11 next year and has a 6%…

A: As per dividend discount model, P0= D1/ (Ke - g), where, P0= Stock price D1= Dividend at the end of…

Q: Avril Synchronistics will pay a dividend of $1.50 per share this year. It is expected that this…

A: Solution:Dividend Discount Model (DDM) is the equity model which calculates the current value of…

Q: CX Enterprises has the following expected dividends $1.09 in one year, $1.23 in two years, and $1.34…

A: Where,P0 = Stock valueD0 = Current dividendg = growth rate in decimal format D0 ( 1 + g) =Expected…

Q: The price of the stock will be $. (Round to the nearest cent.)

A: Stock Price: It refers to the current value of the stock to the buyers and sellers. Thus, it is…

Q: NoGrowth Corporation currently pays a dividend of $2 per year, and it will continue to pay this…

A: Cost of equity: The cost of equity is the minimum rate of return that an investor expects while…

Q: Von Bora Corporation (VBC) is expected to pay a $2.75 dividend at the end of this year. If you…

A: Given information: Dividend : $2.75 Growth rate : 4% Cost of capital : 11%

Q: Krell Industries has a share price of $22.53 today. If Krell is expected to pay a dividend of $0.92…

A: According to the values provided in the question: p0=$22.53d1=$0.92p1=$24.43

Q: CX Enterprises has the following expected dividends: $1.15 in one year, $1.23 in two years, and…

A: Companies can distribute their earnings to shareholders by paying dividends. Companies give…

Q: Company Z earnings and dividends per share will grow indefinitely by 4.9% a year if next year's…

A: The present value of growth opportunities refers to the component of the value of stock that the…

Q: Summit Systems will pay a dividend of $1.55 this year. If you expect Summit's dividend to grow by…

A: Expected Dividend = d = $1.55Growth Rate = g = 5.5%Cost of Capital = r = 10.9%

Q: Summit Systems will pay a dividend of $1.48 this year. If you expect Summit's dividend to grow by…

A: As per the constant dividend growth model price of the stock will be equal to the present value of…

Q: The Boston Brewing Company is planning on issuing common stock at a market price of $13 per share.…

A: COST OF EQUITY  Cost of Capital is the minimum rate of return that must be earned on investments, in…

Q: CX Enterprises has the following expected dividends: $1.06 in one year, $1.24 in two years, and…

A: Dividend discount model is used to determine the current price of the stock. It uses expected future…

Q: 1. Company Yoyo currently pays out a dividend of £2 per share. It reinvests 1/3 of earnings in…

A: Growth rate g = Retention ratio * Return on Investment ( ROI ) Thus, g = 13×15% g = 5%   Current…