Village Goofball stock is currently priced at $71.95 per share and is expected to pay its next dividend, which is expected to be $7.32, in 1 year. The stock has arisk premium of 10.18%, the risk-free rate is 4.91%, and inflation is expected to be 2.92%. What is the stock price of Village Goofball expected to be in 1 year?O $80.71 (plus or minus 10 cents)$82.81 (plus or minus 10 cents)$75.49 (plus or minus 10 cents)$81.38 (plus or minus 10 cents)None of the above is within 10 cents of the correct answer

Here's how to calculate the expected stock price of Village Goofball in 1 year:Capital Asset Pricing…

Answered: Village Goofball stock is currently…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter12: The Cost Of Capital

Section: Chapter Questions

Problem 19P

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A stock is trading at $80 per share. The stock is expected to have a yearend dividend of $4 per share (D1 = $4), and it is expected to grow at some constant rate, g, throughout time. The stock’s required rate of return is 14% (assume the market is in equilibrium with the required return equal to the expected return). What is your forecast of gL?
Your broker has recommended that you purchase stock in ZZZ-Best, Inc. She estimates that the 1-year target price is $70, and ZZZ-Best consistently pays an annual dividend of $8. Based on your analysis, you estimate that the stock has a required rate of 18%. What is the intrinsic value of this stock? O $64.43 O $68.73 O $67.35 O $61.86 O $66.10
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You expect a stock to pay annual dividends of $1.39, $1.16, and $1.87 in each of the next three years, with the first dividend payment occurring one year from today. You also expect a stock price of $33.19 immediately after the stock pays the third annual dividend (i.e., exactly three years from today). If the stock's required rate of return is 6%, what is a fair price for the stock today? Round your answer to the nearest penny: Type your answer.....
Preferred products has issued preferred stock with an annual dividend of $7.00 that will be paid in perpetuity. a. If the discount rate is 10%, at what price should the preferred sell? b. The what price should the stock sell 1 year from now? c. What are the (I) dividend yield; (II) the capital gains yield; (iii) the expected rate of return on the stock?
A stock is trading for a share price of $21.99. You expect it to pay a dividend of $1.58 exactly one year from now, and you expect future annual dividends to grow at 2.9% per year indefinitely. What is the stock's required rate of return? Enter your answer as a decimal and show for decimal places. That is, if your answer is 12.5%, enter .1250. Type your answer...

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