PB-17 Nonconstant Dividends (LOI)Lohn Corporation is expected to pay the following dividends over the next four years$14 $10 $9, and $5 Atened, the company pledges to maintain a comment 6 percentgrowth rate in dividends foreverthe required return on the stock is 14 percent what is the current share price?Mule Cha5442968.2410020$45.70$73.42

Variables in the question:DividendD1=$14D2=$10D3=$9D4=$5D5=Constant growth rate of 6% (forever)…

PB-17 Norconstant Dividends (LO) Lohn Corporation is expected to pay the following dividends over the next four years $14 $10 $9, and $5 Atenesid, the company pledges to maintain a consent 6 percent growth rate in dividends forever the required return on the stock is 14 percent what is the current share price? Huple Chace 56482 О мага 10020 $65.70

PB-17 Norconstant Dividends (LO) Lohn Corporation is expected to pay the following dividends over the next four years $14 $10 $9, and $5 Atenesid, the company pledges to maintain a consent 6 percent growth rate in dividends forever the required return on the stock is 14 percent what is the current share price? Huple Chace 56482 О мага 10020 $65.70

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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A4 8f 8. ABC Co. has the following dividend payment history for the last five years, with the most recent dividend being $1.10: $0.50, $0.60, $0.80, $1.00, $1.10. Expected growth rate of dividends by averaging the growth rates: Year Dividend 1 $1.10 2 $0.50 3 $0.60 4 $0.80 5 $1.00 6 $1.10 Average growth rate is 20.55% Average growth rate = (17.08% + 22.08%+ 22.50%) /3 Average growth rate = 20.55% Dividend growth model f. ABC’s share price is currently $70, and the most recent dividend paid is $1.10 per share. Using the expected growth rate estimated in, calculate the cost of equity using the dividend growth model.
Question 10 (2 points) A firm has 1 million shares outstanding. After-tax earnings have been constant at $5 per share. The firm retains 40% of earnings and pays out the rest in dividend. The shareholder's required rate of return is 15%. Calculate the current share price. $50 $20 $30 $10 $40
Q23 A firm recently paid a $0.45 annual dividend. The dividend is expected to increase by 10 percent in each of the next four years. In the fourth year, the stock price is expected to be $80.If the required return for this stock is 13.5 percent, what is its current value? (Do not round intermediate calculations. Round your answer to 2 decimal places.) CURRENT VALUE---
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Problem 9.27 Staggert Corp. will pay dividends of $5.00, $6.25, $4.75, and $3.00 in the next four years. Thereafter, the company expects its dividend growth rate to be constant at 8.5 percent. If the required rate of return is 17.0 percent, what is the current value of the stock? (Round intermediate calculations and final answer to 2 decimal places, e.g. 16.25.) Current value Click if you would like to Show Work for this question: Open Show Work
QUESTION 7 Manchester plc is expected to pay annual dividends of £1.50, £1.75 and £2.00 per share at the end of each of the next three years (i.e., from t-1 to t=3). After year 3, annual dividends are expected to grow at a rate of 2% forever. Assuming that shareholders of Manchester plc. require a rate of return equal to 5% per year, what is the fair value for the share of Manchester plc.? O £95.52 £64.70 O £48.37 O £63.48
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Q13 The Engineering Company currently has 100,000 outstanding stocks selling at OMR 100 each. The firm has net profits of OMR 1,000,000 and wants to make new investments of OMR 2,000,000 during the period. The firm is also thinking of declaring a dividend of OMR 5 per share at the end of the current fiscal year. The market price of per stock at the end of the current year is expected to be OMR 120. How many number new stocks to be issued by the firm assume that dividend is declared under MM model? a. 10,000 stocks b. 15,000 stocks c. 20,000 stocks d. 12,500 stocks
at 12% •ssume today is December 31, 2019 Imagine works Inc just paid a dividend of $1.40 per shure at the end of 2019. The dividend is expected to Grow per year for 3 years, after which time it is expected to grow at a constant rate of 3,5%. amually. The company's cost of equity (rs) is 9,5%. Using the dividend Growth model Callowing for nunconstant growth), What should be the Price of the of the company's stock today (December 31, 2019)? per share A
2. Problem 10.04 (Cost of Equity with and without Flotation) еВook Problem Walk-Through Jarett & Sons' common stock currently trades at $24.00 a share. It is expected to pay an annual dividend of $2.50 a share at the end of the year (D1 = $2.50), and the constant growth rate is 3% a year. a. What is the company's cost of common equity if all of its equity comes from retained earnings? Do not round intermediate calculations. Round your answer to two decimal places. % b. If the company issued new stock, it would incur an 8% flotation cost. What would be the cost of equity from new stock? Do not round intermediate calculations. Round your answer to two decimal places.
Problem 18-9 MF Corp. has an ROE of 14% and a plowback ratio of 75%. The market capitalization rate is 13%. a. If the coming year's earnings are expected to be $2.30 per share, at what price will the stock sell? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Price b. What price do you expect MF shares to sell for in three years? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Price

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