You've collected the following information from your favorite financial website. 52-Week Price Dividend Hi Lo Stock (Dividend) Yield % PE Ratio Close Price Net Change 77.40 10.43 Acevedo .36 2.6 6 13.90 -.24 55.81 33.42 Georgette, Incorporated 1.54 3.8 10 40.43 -.01 130.94 69.55 YBM 2.05 2.3 10 88.98 3.07 50.24 35.00 13.95 Manta Energy .80 20.74 Winter Sports .32 5.2 1.5 6 28 15.43 ?? -.26 .18 According to analysts, the growth rate in dividends for YBM for the next five years is expected to be 20 percent. Suppose YBM meets this growth rate in dividends for the next five years and then the dividend growth rate falls to 5.25 percent, indefinitely. Assume investors require a return of 12 percent on YBM stock. According to the dividend growth model, what should the stock price be today? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Current stock price
You've collected the following information from your favorite financial website. 52-Week Price Dividend Hi Lo Stock (Dividend) Yield % PE Ratio Close Price Net Change 77.40 10.43 Acevedo .36 2.6 6 13.90 -.24 55.81 33.42 Georgette, Incorporated 1.54 3.8 10 40.43 -.01 130.94 69.55 YBM 2.05 2.3 10 88.98 3.07 50.24 35.00 13.95 Manta Energy .80 20.74 Winter Sports .32 5.2 1.5 6 28 15.43 ?? -.26 .18 According to analysts, the growth rate in dividends for YBM for the next five years is expected to be 20 percent. Suppose YBM meets this growth rate in dividends for the next five years and then the dividend growth rate falls to 5.25 percent, indefinitely. Assume investors require a return of 12 percent on YBM stock. According to the dividend growth model, what should the stock price be today? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Current stock price
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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Nikul
Transcribed Image Text:You've collected the following information from your favorite financial website.
52-Week Price
Dividend
Hi
Lo
Stock (Dividend)
Yield % PE Ratio Close Price Net Change
77.40
10.43
Acevedo .36
2.6
6
13.90
-.24
55.81
33.42
Georgette, Incorporated 1.54
3.8
10
40.43
-.01
130.94
69.55
YBM 2.05
2.3
10
88.98
3.07
50.24
35.00
13.95
Manta Energy .80
20.74
Winter Sports .32
5.2
1.5
6
28
15.43
??
-.26
.18
According to analysts, the growth rate in dividends for YBM for the next five years is expected to be 20 percent. Suppose YBM meets
this growth rate in dividends for the next five years and then the dividend growth rate falls to 5.25 percent, indefinitely. Assume
investors require a return of 12 percent on YBM stock. According to the dividend growth model, what should the stock price be today?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.
Current stock price
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