The XYZ Corporation pays a dividend of $1 for each share and its required rate of return is 8%. Answer the following questions: a). Assuming zero growth in dividends, what is the value of each share?

Q: You own an ordinary share that just paid an annual dividend of $6. The firm expects to grow at a 4%…

A: Value of the stock is referred as current price of the share which is the most recent selling price…

Q: The company's asset turnover is 0.9 payout ratio is 0.60 and price earnings ratio is 10, the…

A: The dividend yield is expressed as the shareholder's return on his initial investment amount for…

Q: Sun Pharma Company earns Rs 10 per share, is capitalized at a rate of 12 per cent and has a rate of…

A: The question is related to Dividend Policy. The Price of Share as oer Gorden's Model is calculated…

Q: If ROE > rS, then a company will increase shareholder value (stock price will go up) when retaining…

A: The return on equity is a metric used to evaluate the yield that the company is providing to the…

Q: Estimate its cost of common equity, Maxell and Associcates recently hired you. Obtain the following…

A: The question is based on the calculation of share value based on the constant growth dividend…

Q: Fun Tyne plc declares a dividend payment of 20p per share. Ignoring taxes and the time value  of…

A: Solution:- In efficient markets, the price of a security reflects immediate effect of all the…

Q: 6. Dividend discount model (S4.3) Company X is expected to pay an end-of-year dividend of $5 a…

A: In the given case, we have provided the expected dividend per share, expected price per share and…

Q: Suppose that investors cumulatively short-sell 6 million shares of a stock and the meantime, the…

A: In short sell one does not own stocks but promises to buy at lower prices but if prices goes up then…

Q: h. Calculate the total return % in each of the following instances: a. Do = $2.00, dividend growth =…

A: Answer Return ={ (Dividend + Capital gain ) / P0}×100

Q: . Dividend discount model (S4.3) Company Y does not plow back any earnings and is expected to…

A: Dividend=$5Stock Price=$40Required:Cost of Equity=?

Q: Suppose firm A has just earned BDT 5 per share out of which it retained BDT 3 and paid out the…

A: Given Information : Earning per share = BDT 5 Retained amount per share = BDT 3 Required rate of…

Q: Dorpac Corporation has a dividend yield of 1.44%. Dorpac's equity cost of capital is 7.42%, and its…

A: Using Gordon’s growth model, the price of a share is calculated using the expected dividend, cost of…

Q: For Company ABC, if stock price P0 = $30; dividend paid at the end of period 1 D1 = $3.00; growth…

A: Required rate of return is the return investor expects from the investment made.

Q: Supposed many investors where cager to buy a company's share, and the price per share surged From 89…

A: The financial market is a platform that allows individuals, businesses, and other entities to buy…

Q: Determine the cost of common stock (equity). The T-Bill rate is 5.2%. The Market Return is 12.7%.…

A: Market Return = 12.7%Beta = 1.27T-Bill Rate = Risk Free Rate = 5.2% ExplanationWe calculate the Cost…

Q: n model holds, wl that the mark ure

A: Given information : EPS  ₹        5.00 ROE 16% Market price  ₹      50.00 DPR 40% Since…

Q: 4. ABC Inc. Distributes 70 % of its profits and uses the rest in the operations of the business. The…

A: Intrinsic value (IV) of the share means actual or current value based on firm’s performance. It is…

Q: Westlake Ltd. just paid a dividend of $2.00 per share, which is expected to grow at a constant rate…

A: To calculate the current share price of Westlake Ltd., we can use the Gordon Growth Model, which is…

Q: 6) Milestone Inc. Distributes 55% of its profits and uses the rest in the operations of the firm.…

A: Dividend Payout Ratio = 55% Retention Ratio = 1-Dividend Payout Ratio = 1-55% = 45% ROE = 22%…

Q: The constant growth model: i.      Assumes that dividend income will increase at a consistent rate…

A: The Constant Growth Model is a technique for valuing stocks. It is also known as the Gordon Growth…

Q: Assume that a company borrows at a cost of 0.08. Its tax rate is 0.35. What is the minimum after-tax…

A: Cost of Capital is the rate that a company is expected to pay on average on all the security holders…

Q: Find the value of each share of a company with 1250 shares if the company is expected to earn…

A: Number of shares outstanding = 1250 sharesExpected income = $ 400000Interest rate = 5%Present value…

Q: Fun Tyne plc declares a dividend payment of 20p per share. Ignoring taxes and the time value of…

A: (Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Westpac pays a current dividend of $0.5, which is expected to grow at a rate of 4% indefinitely. The…

A: Current value of a share is the present value of future dividends and future price of the share;…

Q: calculate the cost of the preference share

A: Cost of preference share = Annual dividend/Current price

Q: A firm's target dividend is $4.40 am (B) is equal to 1? O $-3.30 O $3.30 00 O $1.65

A: Dividends can increase/decrease over the years. The change in dividend can be determined using the…

Q: Mama Inc. utilizes the residual dividend model to determine its ordinary dividend payout. This year…

A: Introduction Under Residual dividend policy the amount of dividends paid to the shareholders amount…

Q: Krell Industries has a share price of $22.12 today. If Krell is expected to pay a dividend of $0.94…

A: Share price today (P0) = $22.12Next year dividend (D1) = $0.94Next year share price (P1) =…

Q: Raysut Cement has a preferred share issue outstanding with a current price of OMR 26.57. The firm is…

A: Preferred shares are the stocks that have a preference over the common stocks of the company, which…

Q: TSC, Inc. sells for $23 and pays an annual per share dividend of $2.50, which you expect to grow at…

A: The required return in the context of the dividend growth model is the minimum rate of return that…

Q: Dorpac Corporation has a dividend yield of 2.3%. ​Dorpac's equity cost of capital is 8.2%​, and its…

A: The Gordon growth model states that the stock price can be calculated by discounting all the future…

Q: Entity X distributed a dividend of $ 50 per share last year. If the business is expected to…

A: Given information : Expected dividend = $50 Required rate of return = 25%

Q: Matilda Industries pays a dividend of £2.10 per share and is expected to pay this amount…

A: Solution: Given, Dividend paid per share =D0 = £2.10 As given in the question, Expected dividend…

Q: If the company's market price per share is $20 and its dividend per share is $4, then its dividend…

A: Dividend yield refers to the rate that shows the yield in terms of the dividends that a stock…

Q: which of the following would be expected to be closest to​ Matilda's stock​ price?

A: Stock valuation is the method of finding the the value of the stock of a company. The present…

Q: Dorpac Corporation has a dividend yield of 1.6%. Its equity cost of capital is 7.1%, and its…

A: Dividend discount model refers to a stock valuation model which is used by the company for…

Q: Abel, Inc. just paid a dividend of $3.0 per share and you think they will continue to pay $3.0 per…

A: Since there is no growth rate that is no growth in dividend price of stock = Dividend / Cost of…

Q: If share price rises from $10 to $12 per share, and pays a dividend of $1 per share, what was the…

A: Given Old price is $10 New price is $12  Dividend paid is $1

Q: If retained earnings were used instead of new issuances, what wo

A: In this question, we have to find the cost of equity and the new financing cost.

Q: Assume that a company’s market beta equals 0.6, the risk-free rate is 5%, and the market return…

A: As per CAPM, Expected Return = Rf +Beta (Rm-Rf)

Q: What is the price per share of NoGrowth stock if the firm's equity cost of capital is 17.49% ?

A: The dividend growth model is a method for estimating the value of a company's stock based on the…

Q: Eastern Electric currently pays a dividend of about $1.64 per share and sells for $27 a share. If…

A: Payout ratio = 0.53 Growth rate = 0.07 or 7.0% Return on equity (ROE) = ?

Q: No-Growth Industries pays out all of its earnings as dividends. It will pay its next $6 per share…

A: Share price for no growth company = Dividend in year 1 / Discount rate   PE Ratio = Market price per…