The Stopperside Wardrobe Co. just paid a dividend of $ 1.81 per share on its stock. The dividends are expected to grow at a constant rate of 7.8% per year indefinitely. If investors require an 12.8% return on The Stopperside Wardrobe Co. stock, answer the following: (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit S sign in your response.) What is the current price? Current price S What will the price be in three years? Stock price in three years S What will the price be in 15 years? Stock price in 15 years S

The Stopperside Wardrobe Co. just paid a dividend of $ 1.81 per share on its stock. The dividends are expected to grow at a constant rate of 7.8% per year indefinitely. If investors require an 12.8% return on The Stopperside Wardrobe Co. stock, answer the following: (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit S sign in your response.) What is the current price? Current price S What will the price be in three years? Stock price in three years S What will the price be in 15 years? Stock price in 15 years S

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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Avondale Aeronautics has perpetual preferred stock outstanding with a par value of $100. The stock pays a quarterly dividend of $3.00 and its current price is $84. What is its nominal annual rate of return? Do not round intermediate calculations. Round your answer to two decimal places. ? % What is its effective annual rate of return? Do not round intermediate calculations. Round your answer to two decimal places. ? %
The stock of Business Adventures sells for $30 a share. Its likely dividend payout and end-of-year price depend on the state of the economy by the end of the year as follows: Boom Normal economy Recession Dividend $ 2.00 1.40 0.50 Required: a. Calculate the expected holding-period return and standard deviation of the holding-period return. All three scenarios are equally likely. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Expected return Standard deviation Answer is complete and correct. Stock Price $ 40 34 25 14.33 22.60 Expected return Standard deviation b. Calculate the expected return and standard deviation of a portfolio invested half in Business Adventures and half in Treasury bills. The return on bills is 5%. (Do not round intermediate calculations. Round your answers to 2 decimal places.) % % Answer is complete but not entirely correct. 8.75 11.30 % %
Stimpson Inc. preferred stock pays a $.50 annual dividend. What is the value of the stock if your required rate of return is .10? Instruction: Type your answer in dollars, and round to two decimal places
Avondale Aeronautics has perpetual preferred stock outstanding with a par value of $100. The stock pays a quarterly dividend of $3.00 and its current price is $79. What is its nominal annual rate of return? Do not round intermediate calculations. Round your answer to two decimal places. % What is its effective annual rate of return? Do not round intermediate calculations. Round your answer to two decimal places.
An investor bought a stock for $18 (at t = 0) and one year later it paid a $2 dividend (at t = 1). Just after the dividend was paid, the stock price was $19 (at t = 1). Inflation over the past year (from t = 0 to t = 1) was 8% pa, given as an effective annual rate. Which of the following statements is NOT correct? All answer options are rounded to 6 decimal places. The stock investment produced a: Question 3 Select one: a. Nominal capital return of 5.555556% pa. b. Nominal total return of 16.666667% pa. c. Real capital return of 14% pa. d. Real income return of 10.288066% pa. e. Real total return of 8.024692% pa.
General Importers announced that it will pay a dividend of $3.65 per share one year from today. After that, the company expects a slowdown in its business and will not pay a dividend for the next 4 years. Then, 6 years from today, the company will begin paying an annual dividend of $1.75 forever. The required return is 11.4 percent. What is the price of the stock today? Multiple Choice O $3.28 $11.31 O $13.24 O $12.22 O $15.35
Carnes Cosmetics Co.'s stock price is $50, and it recently paid a $1.75 dividend. This dividend is expected to grow by 19% for the next 3 years, then grow forever at a constant rate, g; and rs = 15%. At what constant rate is the stock expected to grow after Year 3? Do not round intermediate calculations. Round your answer to two decimal places.
Carter Communications does not currently pay a dividend. You expect the company to begin paying a dividend of $2.00 per share in 12 years, and you expect dividends to grow perpetually at 3 percent per year thereafter. If the discount rate is 11 percent, how much is the stock currently worth? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Price
The Starr Co. just paid a dividend of $1.10 per share on its stock. The dividends are expected to grow at a constant rate of 5 percent per year, indefinitely. Investors require an 11 percent return on the stock. (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.) What is the current price? Current price $ What will the price be in three years? Stock price $ What will the price be in 14 years? Stock price $
Poulter Corporation will pay a dividend of $4.40 per share next year. The company pledges to increase its dividend by 5.75 percent per year, indefinitely. If you require a return of 10 percent on your investment, how much will you pay for the company's stock today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current stock price
Carnes Cosmetics Co.'s stock price is $37, and it recently paid a $1.25 dividend. This dividend is expected to grow by 30% for the next 3 years, then grow forever at a constant rate, g; and rs = 16%. At what constant rate is the stock expected to grow after Year 3? Do not round intermediate calculations. Round your answer to two decimal places.
The Impulse Shopper recently paid an annual dividend of $1.13 per share. The company just announced that it is suspending all dividend payments on its common stock for the next five years. After that, the company expects to pay $.50 a share at the end of each year. At a required return of 18 percent, what is this stock work today? Can the calculator and excel solution be provided?

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