Suppose you know that a company's stock currently sells for $53.47 per share and the required return on the stock is 8.5 percent. You also know that the total return on the stock is evenly divided between capital gains yield and dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share? Answer to two decimals.
Q: The common stock of ABC Industries is valued at $26.7 a share. The company increases its dividend by…
A: We are required to calculate the required rate of return on stock in this question from the…
Q: A company has an outstanding issue of perpetual preferred stock with an annual dividend of $1.65 per…
A: The price of preferred stock is calculated as ratio of annual dividend and required return on stock.
Q: A stock is selling today for $60 per share. At the end of the year, it pays a dividend of $3 per…
A: The dividend is the interest paid to shareholders on outstanding shares.
Q: A stock is selling today for $75 per share. At the end of the year, it pays a dividend of $6 per…
A: Answer and calculations are given below
Q: A company has an outstanding issue of perpetual preferred stock with an annual dividend of $8.85 per…
A: Annual dividend = $8.85 Required return = 9.1%
Q: The expected constant-growth rate of dividends is ______% for a stock currently priced at $76, that…
A: We need to use constant growth model to calculate growth rate P0 =D0(1+g)r-g where P0=current market…
Q: A company's current stock price is $50 per share, while investors' required return is 12.00%. If the…
A: Here we will use the dividend discount model. As per the dividend discount model, the value of a…
Q: Tenney Corp's earnings and per-share common stock dividends are expected to grow at a fixed rate for…
A: Stock price depends upon market conditions. It can be computed through growth rate, expected…
Q: Suppose Wacken, Limited, just issued a dividend of $1.52 per share on its common stock. The company…
A: Let D(-4) = Dividend 4 years ago = $1.2 D(-3) = $1.26 D(-2) = $1.33 D(-1) = $1.44 D0 = $1.52 Let g =…
Q: A share of common stock has just paid a dividend of $3.00. If the expected long-run growth rate for…
A: The market value of the stock is the current stock price in the market at which the trading of the…
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: A stock is selling today for $50 per share. At the end of the year, it pays a dividend of $3 per…
A: Part a: We can determine the values by using the steps below:
Q: WHAT IS THE VALUE OF THE COMMON STOCKS? IF THE COMMON STOCK HAS AN ANNUAL DIVIDEND OF $200 PER…
A: Value of the common stock can be calculated using Gordon growth model. Value of common stock =…
Q: Suppose you bought 1,050 shares of stock at an initial price of $55 per share. The stock paid a…
A: Return on investments in stock which giving dividend will be dividend received and capital gain or…
Q: Suppose Potter Ltd. just issued a dividend of $2.54 per share on its common stock. The company paid…
A: The cost of equity capital is the minimum required rate of return expected by investors. The cost of…
Q: A company is expected to pay a dividend of $6.73 in the following period. If the expected growth…
A: D1 = $6.73 Growth rate (g) = 4% r = 11%
Q: Suppose you know that a company's stock currently sells for $51.48 per share and the required return…
A: Introduction: Current Stock price 51.48 Required return = 6.13% Capital gain and dividend yield are…
Q: The market capitalization rate on the stock of Aberdeen Wholesale Company is 10%. Its expected ROE…
A: Constant growth model is also regarded as Gordon Growth model which is used to determine the stock…
Q: Suppose Hornsby Ltd. just issued a dividend of $2.55 per share on its common stock. The company paid…
A: Calculating the value of cost of equity capital using arithmetic growth rates. We have,(a)…
Q: The Drogon Co. just issued a dividend of $2.85 per share on its common stock. The company is…
A: COST OF EQUITY : = (NEXT YEAR DIVIDEND / PRICE) + GROWTH RATE
Q: Krell Industries has a share price of $22.53 today. If Krell is expected to pay a dividend of $0.92…
A: According to the values provided in the question: p0=$22.53d1=$0.92p1=$24.43
Q: A share of Koko's common stock just paid a dividend of $1.00. If the expected long-run growth rate…
A: Given information: Dividend paid (D0) : $1 Growth rate (g) : 5.4% Required return (r) : 11.4%
Q: What is the current price of a share of stock when the current dividend is $4.75, the growth rate is…
A: Current price of a share of stock is referred as current price or value of the share which is the…
Q: A share of Green Inc.'s common stock just paid a dividend of D0 = $1.00. If the expected long-run…
A: Dividend Discount model would be providing the stock price and required rate of return on the basis…
Q: Grateful Eight Co. is expected to maintain a constant 4 percent growth rate in its dividends…
A: Given: dividend yield = 5.8% growth rate of dividends in perpetuity = 4% Gordon growth model states…
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 firm has an expected dividend next year of $1.20 per share, a zerogrowth rate of dividends, and a…
A: Value per share is calculated by dividend growth model. By DGM: Value per share = D1/(r-g) D1 is…
Q: Suppose you know a company's stock currently sells for $80 per share and the required return on the…
A: Stock Price = $80 Required rate of return = 12%
Q: ABC Inc. just paid a dividend of $2 and the dividends are expected to indefinitely grow at a…
A: In the Given question following details are given for ABC Inc. Just paid dividend = $2 Growth rate =…
Q: Suppose a company just paid dividnd of $2.19.The dividend is expected to grow at 5.99% each year. If…
A: As per Dividend Growth model, Current stock Price (P0) = D1 / (ke-g) Where, D1 = D0 *(1+g) Ke…
Q: Guava Computers currently has earnings per share of $2.40, a dividend payment per share of $0.80,…
A: The rate of return on equity reflects the net earnings of the company given the worth of its equity.…
Q: What is the current value of the common stock of Clump Dump Kitty Litter, Ltd., if you know the…
A: Dividend yield is the yield which shows the percentage of dividend which a stock is going to…
Q: What is the rate of return on a stock that currently sells for GH₵ 36 and is expected to sell for…
A: Dividend yield refers to the ratio of the annual dividend to the current share price. The dividend…
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: Ovit, Inc. has preferred stock with a price of $19.61 and a dividend of $1.53 per year. What is its…
A: Given, Annual dividend = $1.53 Current stock price = $19.61 Dividend yield = Annual dividend /…
Q: Suppose Wacken, Limited, just issued a dividend of $2.59 per share on its common stock. The company…
A:
Q: Suppose you know that a company's stock currently sells for $53.47 per share and the required return…
A: The dividend is the amount that is the return received to the shareholders from the organization on…
Q: A stock is selling today for $60 per share. At the end of the year, it pays a dividend of $3 per…
A: The stock return refers to the difference between the closing stock price and the initial stock…
Q: Glenhill Co. is expected to maintain a constant 6.6% growth rate in its dividends indefinitely. If…
A: The dividend discount model is a model of stock valuation and calculating the cost of equity. It…
Q: Suppose Stark Ltd. just issued a dividend of $2.59 per share on its common stock. The company paid…
A: Formula: Growth rate = ( Current year dividend - previous year dividend ) / Previous year dividend.
Q: Given that the cost of common stock is 15 percent, dividends are P1.50 per share, and the price of…
A: To calculate the growth rate we will use the dividend grow modal formula P0 = D1/(r-g) Where P0 -…
Q: Mannix Corporation stock currently sells for $60 per share. The market requires a return of 14…
A: Stock Price = $60 Required rate of return = 14% Constant Growth rate = 6%
Q: Suppose your company is expected to grow at a constant rate of 6 percent long into the future. In…
A: Computation of value of firm’s stock:
Q: First Bank's annual dividends are indicated below. Find the required rate of return for this stock,…
A:
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 2 images
- Suppose you know that a company's stock currently sells for $51.48 per share and the required return on the stock is 6.13 percent. You also know that the total return on the stock is evenly divided between capital gains yield and dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share? Answer to two decimals.Suppose you know that a company's stock currently sells for $53.47 per share and the required return on the stock is 8.5 percent. You also know that the total return on the stock is evenly divided between capital gains yield and dividend yield. If it's the company's policy to always maintaina constant growth rate in its dividends, what is the current dividend per share? Answer to two decimals.Suppose you know that a company's stock currently sells for $66.60 per share and the required return on the stock is 11 percent. You also know that the total return on the stock is evenly divided between capital gains yield and dividend yield. If It's the company's policy to always maintain a constant growth rate In its dividends, what is the current dividend per share? Note: Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Dividend per share
- Suppose you know that a company's stock currently sells for $65.90 per share and the required return on the stock is 12 percent. You also know that the total return on the stock is evenly divided between capital gains yield and dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Dividend per shareSuppose you know that a company’s stock currently sells for $54 per share and the required return on the stock is 9 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If it’s the company’s policy to always maintain a constant growth rate in its dividends, what is the current dividend per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)In the context of DDM, a dividend payout ratio equal to 100% implies that the future growth rate of dividends per share (DPS) will be equal to 0%. a. True b. False
- The Evanec Company's next expected dividend, D1, is $3.08; its growth rate is 4%; and its common stock now sells for $39.00. New stock (external equity) can be sold to net $31.20 per share. a. What is Evanec's cost of retained earnings, rs? Do not round intermediate calculations. Round your answer to two decimal places. rs b. What is Evanec's percentage flotation cost, F? Round your answer to two decimal places. F = % c. What is Evanec's cost of new common stock, re? Do not round intermediate calculations. Round your answer to two decimal places. re = %3. Guava Computers currently has earnings per share of $2.40, a dividend payment per share of $0.80, and book equity per share of $10. a. What is the company's rate of return on equity? What is its plowback ratio? b. Using the plowback/rate of return method, estimate the growth rate of dividend payments per share. What is your estimate of the capitalization rate on Guava's stock if the stock is currently selling for $23.20 с. per share? d. What is your estimate of the company's present value of growth opportunities if its discount rate is 15 percent?Suppose a firm issues a dividend of $10.00 per share and plans to issue a constant dividend of $2.00 per share starting from year 1. What is the stock price of the firm's common share? Suppose the discount rate is 9% (rounded to the 2nd decimal place in a percentage) (eg, 33.33%) ubmit. Click Save
- Suppose you know a company's stock currently sells for $60 per share and the required return on the stock is 12 percent. You also know that the total return on the stock is evenly divided between a capital gains yield and a dividend yield. If it's the company's policy to always maintain a constant growth rate in its dividends, what is the current dividend per share? Multiple Choice O O $3.60 $3.23 $3.40 $6.79A stock is selling today for $50 per share. At the end of the year, it pays a dividend of $3 per share and sells for $58. A. What are the dividend yield and percentage capital gain? B. Now suppose the year-end stock price after the dividend is paid is $42. What are the dividend yield and percentage capital gain in this case? (Negative amounts should be indicated by a minus sign. Enter your answers as a whole percent.)A stock is selling today for $75 per share. At the end of the year, it pays a dividend of $6 per share and sells for $81. Required: a. What is the total rate of return on the stock? b. What are the dividend yield and percentage capital gain? c. Now suppose the year-end stock price after the dividend is paid is $69. What are the dividend yield and percentage capital gain in this case?