Stock valuation Lory Company had net earnings of $127,000 past year, of which $46,200 was paid out in dividends. The company's equity was $1,587,500. Lory has 200,000 shares outstanding with a current market price of $11.63 per share. Both the number of shares and the dividend payout ratio are constant. Requirements: a) What is the required rate of return on equity if the earnings growth rate is 5.6 percent and is expected to remain constant at the current level?  b) Following question a) above, what is the expected stock price in 15 years?

Q: NoRagrets, Inc is expected to pay a dividend in year 1 of $2 and a dividend in year 2 of $2.40.…

A: Given information,Dividend in year 1: Dividend in year 2: Rate of return: Growth rate: To…

Q: Suppose you know that a company’s stock currently sells for $54 per share and the required return on…

A: Current Stock price =$54 Required return = 9% Capital gain and dividend yield are equal Then,…

Q: Magic Candy Co. expects to earn $4.75 per share during the current year, its expected dividend…

A: Step 1: Calculate the dividend per share (D1) for the next period.Dividend payout ratio = Dividend…

Q: A company currently issues dividends at a rate of $1.25 per share.  It has cost of equity of 6% and…

A: The Dividend Discount Model (DDM) is a valuation method used to estimate the fair value of a stock…

Q: (Common stock valuation) Wayne, Inc.'s outstanding common stock is currently selling in the market…

A: Market price = $33 Current Dividend = d0 = $3.11 Return on equity = roe = 34% Retention rate = rr =…

Q: Suppose Stark Ltd. just issued a dividend of $2.08 per share on its common stock. The company paid…

A: Workings: Formula: Growth rate = ( Current year dividend - previous year dividend ) / previous year…

Q: A company is expected to maintain a constant 3 percent growth rate in its dividends indefinitely. If…

A: Information provided:Constant growth rate = 3%Dividend yield = 4.85%

Q: Cullumber Wok Co. is expected to pay a dividend of $1.70 one year from today on its common shares.…

A: Expected Dividend = $1.70 Growth Rate = 5% Current Stock Price =$17.00

Q: what is the required rate of return?

A: The non-constant dividend growth model is a technique for evaluating the intrinsic stock value. It…

Q: A company has stock which costs $42.75 per share and pays a dividend of $2.70 per share this year.…

A: Using dividend discount model price = dividend next year/(cost of equity - growth rate)

Q: Mannix Corporation stock currently sells for $27 per share. The market requires a return of 10.8…

A: Dividend is the amount paid by the company from the profit to the share holders of the company.…

Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.