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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Similar questions

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
Crisp Cookware's common stock is expected to pay a dividend of $2.75 a share at the end of this year (D1 = $2.75); its beta is 0.9. The risk-free rate is 5.3% and the market risk premium is 6%. The dividend is expected to grow at some constant rate, gL, and the stock currently sells for $80 a share. Assuming the market is in equilibrium, what does the market believe will be the stock's price at the end of 3 years (i.e., what is )? Do not round intermediate calculations. Round your answer to the nearest cent.
Preferred Products has issued preferred stock with an annual dividend of $8.25 that will be paid in perpetuity. a. If the discount rate is 11%, at what price should the preferred sell? b. At what price should the stock sell 1 year from now? c. What are the : dividend yield; capital gains yield; expected rate of return of the stock?
Clinton Corporation is expected to pay a dividend of $3.50 next year and $5.50 the year after that. At this point (end of year 2 beginning of year 3) the growth rate in dividends is expected to be 0.05 into the foreseeable future. The required return on stock's of similar risk is 12%. What is the current price Po? Answer should be to nearest penny: ex: 20.32 Be sure to round correctly 20.326 would be 20.33 Your Answer: Answer
The current dividend, D0, of the stock of Sun Devil Corporation is $3 per share. Under present conditions, this dividend is expected to grow at a rate of 4 percent annually for the foreseeable future. The beta of Sun Devil stock is 1.4. The risk-free rate of return is 7 percent, and the expected market rate of return is 13 percent. Round your answers to the nearest cent. At what price would you expect Sun Devil common stock to sell?$ If the risk-free rate of return declines to 5 percent, what will happen to Sun Devil’s stock price? (Assume that the expected market rate of return remains at 13%, the dividend growth rate remains at 4%, and D0 remains at $3.)$ Sun Devil’s management is considering acquisitions in the machine tool industry. Management expects the firm’s beta to increase to 1.6 as a result of these acquisitions. The dividend growth rate is expected to increase to 6 percent annually. Would you recommend this acquisition program to management? (Assume the same…
The current price of XYZ stock is OMR80.00. Dividends are expected to grow at 5% indefinitely and the most recent dividend was OMR2.75. What is the required rate of return on XYZ stock?
A year from now, the expected price of a stock is $178; the expected dividend is $3. The required return is 10%. What is the appropriate price for the stock today? answer is 164.55
Analysts expect Exxon Mobil stock to pay a dividend of $3.43 in 1 year and is expected to sell for $47.91 at that time. If the required return is 5.0%, what is the value of the stock?
Preferred Products has issued preferred stock with an annual dividend of $6.50 that will be paid in perpetuity. a. If the discount rate is 10%, at what price should the preferred sell? (Round your answer to 2 decimal places.) b. At what price should the stock sell 1 year from now? (Round your answer to 2 decimal places.) c. What are the (i) the dividend yield; (ii) the capital gains yield; (iii) the expected rate of return of the stock? (Enter your answers as a whole percent.)
Electric Pink stock is expected to pay a dividend of $1.09 in 1 year. The stock is currently priced at $22.64, is expected to be priced at $25.36 in 1 year, and is expected to be priced at $27.37 in 2 years. What is the dividend in 2 years expected to be for Electric Pink stock?The stock's dividend is paid annually and the next dividend is expected in 1 year. $1.27 (plus or minus 10 cents) $2.26 (plus or minus 10 cents) $6.62 (plus or minus 10 cents) $1.18 (plus or minus 10 cents) the answer cannot be obtained based on the given information
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.....

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