Question 8: A stock is expected to pay a dividend of £2.50 next year, and its dividends are expected to grow at 4% annually. If the required return is 10%, what is the stock's value? A) £25.00 B) £50.00 C) £41.67 D) £52.08 3
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- A company currently pays a dividend of $2 per share (D0 = $2). It is estimated that the company’s dividend will grow at a rate of 20% per year for the next 2 years and then at a constant rate of 7% thereafter. The company’s stock has a beta of 1.2, the risk-free rate is 7.5%, and the market risk premium is 4%. What is your estimate of the stock’s current price?Suppose Lilly V, Inc. has just paid a dividend. The next dividend, to be paid in a year, is forecasted to be $4. If the growth rate of dividends is 7% and the discount rate is 11%, at what price will the stock sell? a.Less than $100 b.More than $100 c.$100 d.$111A stock is expected to pay its first $0.8 dividend in 3 years from now (t=3). The dividend is expected to be paid annually forever and grow by 2% pa. The discount rate is 8% pa. Estimate what the stock price will be in 2.25 years from now. The stock price at time 2.25 is expected to be: Select one: a. $13.9408 b. $13.6675 c. $13.5924 d. $13.1368 e. $12.5855
- Assume a stock paid a dividend of $1 per share over the last year, the required rate of return on the stock is 5%, and the dividends are expected to grow at a constant rate of 11% into the future. What is the intrisic value of this stock? A. $16.67 B. $17.50 C. $9.55 D. Cannot determine without additional informationIf the current year's dividend was $2 per share and all future dividends will decrease by 5% annually. What is the stock worth today at a required return of 15%?A. 9.5 B. 10C. 20Question 3: You are considering issuing a stock that will pay a dividend of $1.00 a year from today. The base case assumption is that the dividend will grow at an annual rate of 10% for two years that, then at 6% for another five years and then will grow at 4% annually for ever. If the required rate of return on similar stocks is 12% what should be the price of the stock? after
- A stock that pays a constant dividend of $1.50 forever currently sells for $10.71. What is the required rate of return? O 10% O 12% O 13% O 14% O 15%An issue of common stock is expected to pay a dividend of $5.15 at the end of the year. Its growth rate is equal to 6%. If the required rate of return is 10%, what is its current price? A) $128.75 B) $96.00 C) $36.92 D) None of these options are correctPlease choose the correct answer
- 10. You expect a share of stock to pay dividends of $1, $1.25, and $1.50 in each of the next 3 years. You believe the stock will sell for $20 at the end of the third year. a. What is the stock price if the discount rate for the stock is 10%? (Round your answer to the nearest cent.) b. What is the dividend yield? (Round your answer to 2 decimal places.)CanPro Co. is expecting that its dividend for this coming year will be $1.2 a share and that all future dividends are expected to increase by 3 percent annually. What is the required return of this stock if the current market price of the stock is $17? a. 11.00% b. 9.67% c. 11.74% d. 10.06%A firm has just paid a $6.00 annual dividend. The dividend is projected to grow at 6.20% per year indefinitely. If the stock sells today for $120.00, what is the required rate of return on the stock? a . 10.19% b. 11.51% c. 6.20% d. 15.77% e. 11.20%
