Problem 9.18 (Nonconstant Growth stock Valuation) Taussing Technologies Corporation (TTC) has been growing at a rite of 19% per year in recent years. This some growth rate is expected to last for another 2 years, to 9n = 8% then decline - a) If Po= $3.00 and r₂ = 9%, what is TTC's stock worth today? What is its expected dividend yield at this time, that is, during Year 1? What is its capital gains yields at this time, that is, during Year 1 ? c) What will TTC's dividend and capital gains yields be once its penod of supernormal growth ends? (Hint: These values will be the same regardless of whether you examine the case of 2 or 5 years of supernormal growth; the Calculations are very easy.) Dividend yield Capital gains yield

Problem 9.18 (Nonconstant Growth stock Valuation) Taussing Technologies Corporation (TTC) has been growing at a rite of 19% per year in recent years. This some growth rate is expected to last for another 2 years, to 9n = 8% then decline - a) If Po= $3.00 and r₂ = 9%, what is TTC's stock worth today? What is its expected dividend yield at this time, that is, during Year 1? What is its capital gains yields at this time, that is, during Year 1 ? c) What will TTC's dividend and capital gains yields be once its penod of supernormal growth ends? (Hint: These values will be the same regardless of whether you examine the case of 2 or 5 years of supernormal growth; the Calculations are very easy.) Dividend yield Capital gains yield

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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Taussig Technologies Corporation (TTC) has been growing at a rate of 15% per year in recent years. This same growth rate is expected to last for another 2 years, then decline to gn = 6%. If D0 = $1.20 and rs = 13%, what is TTC's stock worth today? Do not round intermediate calculations. Round your answer to the nearest cent.$ What is its expected dividend yield at this time, that is, during Year 1? Do not round intermediate calculations. Round your answer to two decimal places. %What is its capital gains yields at this time, that is, during Year 1? Do not round intermediate calculations. Round your answer to two decimal places. What will TTC's dividend and capital gains yields be once its period of supernormal growth ends? (Hint: These values will be the same regardless of whether you examine the case of 2 or 5 years of supernormal growth; the calculations are very easy.) Round your answers to two decimal places.Dividend yield: %Capital gains yield
Problem 1: Nachman Industries just paid a dividend of Do = $1.32. Analysts expect the company's dividend to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The required return on this low-risk stock is 9.00%. What is the best estimate of the stock's current market value?
Solve this
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Farelli Corporation (NFC) last dividend was $1.55. The dividend growth rate is expected to be constant at 1.5% for 2 years, after which dividends are expected to grow at a rate of 8.0% forever. NFC's beta coefficient 1.334, return on market portfolio is 10 percent, and return on risk-free asset is 4 percent. What is the current stock price of NFC?
1. Problem 9.02 (Constant Growth Valuation) Tresnan Brothers is expected to pay a \$3.30 per share dividend at the end of the year(1.e.D1=53.20). The dividend is expected to grow at a constant rate of 94 a year. The required rate of tetura on the stock,fmis16%. What is the stock's current value per share? Round vour answer to the nearest cent.
4( see picture
Assume that Stock X is fairly priced today. Stock X just distributed a per share dividend of $1. It is expected that the company will increase its dividend by 20% in the coming year, 15% in the second year, 10% in the third year, and 5% in the fourth year. Starting from the fifth year, the company will maintain the dividend growth rate to be 5% per year forever. How much is Stock X worth today if its equity cost of capital is 10%? With clear calculation and formula
9. Non-constant growth problem: the expected dividends in years 1, 2 and 3 are 3, 4 and 5.50. After that, it settles down to a constant growth rate of 5.5%. If you require a 9% return, what would you pay for the stock today?
1.A stock is expected to pay a dividend of $2.75 at the end of the year (i.e., D1 = $2.75), and it should continue to grow at a constant rate of 10% a year. If its required return is 14%, what is the stock's expected price 4 years from today? Do not round intermediate calculations. Round your answer to the nearest cent. = $ 2. Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Computech to begin paying dividends, beginning with a dividend of $1.00 coming 3 years from today. The dividend should grow rapidly—at a rate of 29% per year—during Years 4 and 5, but after Year 5, growth should be a constant 6% per year. If the required return on Computech is 18%, what is the value of the stock today? Do not round intermediate calculations. Round your answer to the nearest cent. = $
Taussig Technologies Corporation (TTC) has been growing at a rate of 13% per year in recent years. This same growth rate is expected to last for another 2 years, then decline to gn = 7%. a. If D₁ = $2.90 and rs = 13%, what is TTC's stock worth today? Do not round intermediate calculations. Round your answer to the nearest cent. $ What is its expected dividend yield at this time, that is, during Year 1? Do not round intermediate calculations. Round your answer to two decimal places. % What is its capital gains yields at this time, that is, during Year 1? Do not round intermediate calculations. Round your answer to two decimal places. % b. Now assume that TTC's period of supernormal growth is to last for 5 years rather than 2 years. How would this affect the price, dividend yield, and capital gains yield? I. Due to the longer period of supernormal growth, the value of the stock will be higher for each year. Although the total return will remain the same, the distribution between dividend…

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