REC gave a current dividend (in 2022) of 153% on the face value of Rs.10. Its current share price 295.75. Over the last one year, REC share price has moved up from Rs 99.1 to Rs 114.4. The table below shows the dividend per share of REC over the last five years. Year DPS Mar 2018 9.15 2019 11 2020 11 2021 12.71 2022 15.3 Further during the past 10 years, the average Dividends Per Share Growth Rate was 12.80% per year. REC is expected to grow at this rate for a period of 6 years and thereafter, if the growth rate will fall and stabilize at 8% afterwards. 1 Calculate the dividend vield

REC gave a current dividend (in 2022) of 153% on the face value of Rs.10. Its current share price 295.75. Over the last one year, REC share price has moved up from Rs 99.1 to Rs 114.4. The table below shows the dividend per share of REC over the last five years. Year DPS Mar 2018 9.15 2019 11 2020 11 2021 12.71 2022 15.3 Further during the past 10 years, the average Dividends Per Share Growth Rate was 12.80% per year. REC is expected to grow at this rate for a period of 6 years and thereafter, if the growth rate will fall and stabilize at 8% afterwards. 1 Calculate the dividend vield

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 8e 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. Historical growth rate estimation What is the compound growth rate of dividends based on the last five years of dividends data? Compounded Growth Rate=(Dividend in Year 5/Dividend in Year 1)(1/N)− Compounded Growth Rate=(1.1/0.5)(1/5)−1 Compounded Growth Rate=2.2(1/5)−1 Compounded Growth Rate = 1.1708 – 1 Compounded Growth Rate = 17.08% Year Dividend 1 $1.10 2 $0.50 3 $0.60 4 $0.80 5 $1.00 6 $1.10 ABC has a retention ratio of 0.9 and a historical return on equity (ROE) of 0.25. Using these two additional pieces of information, calculate an alternative estimate of dividend growth rate, g. Growth rate = Retention ratio x ROE ROE=0.25 Retention ratio =0.9 Growth rate =0.9…
A company is considering the following two dividend policies for the next five years. Year Policy #1 Policy #2 1 $4.00 $6.00 2 $4.00 $2.70 3 $4.00 $5.00 4 $4.00 $3.10 5 $4.00 $3.20 Required: Part 1: How much total dividends per share will the stockholders receive over the five year period under each policy? Part 2: If investors see no difference in risk between the two policies, and therefore apply a 9.4% discount rate to both, what is the present value of each dividend stream? Part 3: Suppose investors see Policy #2 as the riskier of the two. And they therefore apply a 9.4% discount rate to Policy #1 but a 14% discount rate to Policy #2. Under this scenario, what is the present value of each dividend stream? Part 4: What conclusions can be drawn from this exercise?
Plc plc has paid the following dividends over the past seven years: Year Dividend per share 2020 £2.30 2019 £2.22 2018 £2.05 2017 £1.95 2016 £1.86 2015 £1.79 2014 2013 £1.74 £1.65 i) Based on the information provided above, apply Gordon’s growth model to compute the dividend growth rate.
10-2 We have the following information on the share prices of Papa Smirph Corporation over the last five years. Calculate the total dollar return and percentage return on each share. Year Papa Smirph share price Annual dividend per share 1 $20 $1.00 2 $22 $1.10 3 $24 $1.20 4 $26 $1.30 5 $28 $1.40 Select one: a. $12; 60% b. $14; 70% c. $19.7; 61.6% d. $19.7; 98.5% e. $12; 78.5%
A firm paid its annual dividend of $1.16 per share on its stock yesterday. The dividend is expected to grow at a constant rate of 1.07 percent per year into the foreseeable future. The expected rate of return on this stock is 9.47 percent. What is the value of one share of this stock today? O $1.28 $12.25 $13.81 O $13.96 $108.41
The common shareholders of BFG inc. received the following dividends (per share) in recent years: $0.10 in March 2019, $0.15 in March 2020, $0.15 in March 2021 and $0.20 in March 2022 (the dividend is still paid at the end of March). Dividend growth is expected to continue at the average historical rate for another four years. Thereafter, the dividend growth rate will be 5%. The rate of return demanded by the common shareholders of BFG inc. is 14%. Your valuation date is the beginning of April 2022. Calculate the average growth rate of the dividend per share over the last financial years, from March 2019 to March 2022 and calculate the price at which this common stock should sell based on the information provided to you.
The following table gives Foust Company’s earnings per share for the last 10 years.The common stock, 7.8 million shares outstanding, is now (1/1/19) selling for $65.00 pershare. The expected dividend at the end of the current year (12/31/19) is 55% of the 2018EPS. Because investors expect past trends to continue, g may be based on the historicalearnings growth rate. (Note that 9 years of growth are reflected in the 10 years of data.) The current interest rate on new debt is 9%; Foust’s marginal tax rate is 40%, and its targetcapital structure is 40% debt and 60% equity.a. Calculate Foust’s after-tax cost of debt and common equity. Calculate the cost of equityas rs = D1/P0 + g.b. Find Foust’s WACC.Copyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).Editorial review has deemed that any suppressed content does not…
Assume Tourism corporation in Oman paid dividend OMR 6 per share last year. The dividends are expected to decline at 4 % in perpetuity and the discount rate is 0.131. what is the value of the stock in year 2
Easttown Productions just paid an annual dividend of $7.85 per share. Future dividends are expected to increase by 2 percent annually. What is one share of this stock worth at a required rate of return of 12.25 percent? A. $78.12 B. $100.88 C. $95.02 D. $76.59 E. $64.08
Roundall dollar answers to 2 decimal places and record all interest rate, coupon rate and growth rate answers as a percentrounded to one decimal place 46. IBIS Corporation has had dividends grow from $2.50 per share to $6.85 per share over the last 10 years (the$6.85 per share dividend was paid yesterday; that is, D0 = $6.85). This compounded annual growth rate individends is expected to continue into the future forever. If the current market price of IBIS’s stock is $54.00per share, what rate of return do investors expect to receive from buying IBIS stock? (Record your answerrounded to 1 decimal place; for example, record 18.29654% as 18.3).47. Jazper, Inc. just paid a dividend of $4.12 per share (that is, D0 = 4.12). If the growth rate in Jazper’s dividendsis expected to shrink every year (forever) by 8 percent (that is, g = -8.0% = -.08) and if Jazper’s required rateof return on equity is 26.2%, what is the current equilibrium price of Jazper’s stock?
ABC plc has paid the following dividends over the past seven years: Year Dividend per share 2014 £2.35 2013 £2.28 2012 £2.10 2011 £1.95 2010 £1.82 2009 £1.80 2008 2007 £1.73 £1.61 i) Based on the information provided above, apply Gordon’s growth model to compute the dividend growth rate. explain how to find growth rate by showing formula which will used. ii) If you can earn 13% percent on similar-risk investments, what is the most you would be willing to pay per share?
eBook The following table gives Foust Company's earnings per share for the last 10 years. The common stock, 7.2 million shares outstanding, is now (1/1/22) selling for $79.00 per share. The expected dividend at the end of the current year (12/31/22) is 60% of the 2021 EPS. Because investors expect past trends to continue, g may be based on the historical earnings growth rate. (Note that 9 years of growth are reflected in the 10 years of data.) EPS Year 2012 $5.73 2013 6.19 2014 6.68 2015 7.22 2016 7.80 The current interest rate on new debt is 12%; Foust's marginal tax rate is 25%; and its target capital structure is 55% debt and 45% equity. a. Calculate Foust's after-tax cost of debt. Round your answer to two decimal places. % % EPS $3.90 4.21 4.55 4.91 5.31 Calculate Foust's cost of common equity. Calculate the cost of equity as rs = D₁/Po + g. Do not round intermediate calculations. Round your answer to two decimal places. Year 2017 2018 2019 2020 2021 % b. Find Foust's WACC. Do not…

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