redo to give me the accurate answer for b please in the first picture in addition redo thois problem by given me the accurate answer it is nit close to $24... Lohn Corporation is expected to pay the following dividends over the next four years: $9, $7, $3, and $1. Afterward, the company pledges to maintain a constant 4 percent growth rate in dividends forever. If the required return on the stock is 12 percent, what is the current share price?
redo to give me the accurate answer for b please in the first picture in addition redo thois problem by given me the accurate answer it is nit close to $24... Lohn Corporation is expected to pay the following dividends over the next four years: $9, $7, $3, and $1. Afterward, the company pledges to maintain a constant 4 percent growth rate in dividends forever. If the required return on the stock is 12 percent, what is the current share price?
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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Question
redo to give me the accurate answer for b please in the first picture
in addition redo thois problem by given me the accurate answer it is nit close to $24...
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Lohn Corporation is expected to pay the following dividends over the next four years: $9, $7, $3, and $1. Afterward, the company pledges to maintain a constant 4 percent growth rate in dividends forever. |
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If the required return on the stock is 12 percent, what is the current share price? |
Transcribed Image Text:If you look at stock prices over any year, you will find a high and low stock price for the
year. Instead of a single benchmark PE ratio, we now have a high and low PE ratio for
each year. We can use these ratios to calculate a high and a low stock price for the next
year. Suppose we have the following information on a particular company over the past
four years:
Year 1
Year 2 Year 3
$
High price $99.70
Year 4
$132.70 $149.33
Low price
EPS
74.53
8.98
123.30
90.64
10.73
71.32 117.85
11.81
13.20
Earnings are projected to grow at 9 percent over the next year.
a. What is your high target stock price over the next year? (Do not round intermediate
calculations and round your answer to 2 decimal places, e.g., 32.16.)
b. What is your low target stock price over the next year? (Do not round intermediate
calculations and round your answer to 2 decimal places, e.g., 32.16.)
a. High target stock price
b. Low target stock price
162.77
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