Suppose that the initial dividend on a stock is £1. The interest rate is 3 percent and the growth rate of dividends is constant at 2 percent. What Is the prics of the stock?
Q: What is the current price of a share of stock when the current dividend is P5, the growth rate is…
A: Under dividend growth model, the current price of stock can be calculated as follows:…
Q: What will be the nominal rate of return on a perpetual preferred stock with a $100 par value, a…
A: Computation:
Q: Calculate the value of a preferred stock that pays a dividend of $6 per share if your required rate…
A: In this problem we need to compute the value of preferred stock from following details: Annual…
Q: A stock is selling today for $50 per share. At the end of the year, it pays a dividend of $3 per…
A: Total yield is divided into Dividend yield and % capital gain yield
Q: A stock is expected to pay a $1.90 dividend. The expected return of the stock is 13.7% and dividends…
A: This Question is based on dividend discount model. We are required to calculate the value of stock
Q: What is the current price of a share of stock when last year’s dividend was P3.00, the growth rate…
A: This question is based on dividend growth model, according to which the price of a stock is given by…
Q: What's the value of the preferred stock if it is assumed it has an annual dividend of $7.50 per…
A: Preferred stock does not grant voting rights to shareholders and pays dividends to the shareholders…
Q: A share of common stock has just paid a dividend of $3.00. If the expected long-run growth rate for…
A: The market value of the stock is the current stock price in the market at which the trading of the…
Q: Suppose you know that a company’s stock currently sells for $54 per share and the required return on…
A: Current Stock price =$54 Required return = 9% Capital gain and dividend yield are equal Then,…
Q: 5. What is the current price of a share of stock when the current dividend is $4.75, the growth rate…
A: Current market price of the share refers to the fair value of share by considering the discounted…
Q: A stock is selling today for $50 per share. At the end of the year, it pays a dividend of $3 per…
A: Part a: We can determine the values by using the steps below:
Q: If the dividends of a preferred stock is expected to remain constant at $15 per share indefinitely,…
A: The share price is the current market price of the share. It is the price of the share at any…
Q: Suppose the current dividends on a stock are $4.7 per share and dividends are expected to increase…
A: The Value of Stock will be calculated with the help of Gorden's Model. It is calculated with the…
Q: A share of common stock just paid a dividend of RM1.00. If the expected long-run growth rate for…
A: Current price of the stock refers to the present market value of the stock at which stocks can be…
Q: 1.If a stock is selling at Tk.365 and the current dividends is Tk.35. What might themarket assuming…
A: Dividend discount model (DDM)- It is a method of valuing a company's stock price based on the logic…
Q: A common stock pays a current dividend of $2. The dividend is expected to grow at an 8-percent…
A: Current dividend =$2 Growth rate =8% Discount rate =12%
Q: A stock just paid a dividend of DO = $1.75. The required rate of return is rs=12.0%, and the…
A: In this question we need to compute the current stock price from the below given details : Just paid…
Q: A preferred stock will pay a dividend of $1 per year. If the annual return is 7.63%, what is the…
A: Stock price today = Annual dividend / Annual return where, Annual dividend = $1 Annual return =…
Q: The following graph shows the value of a stock's dividends over time. The stock's current dividend…
A: Calculate the future value and present value for expected dividends as follows:
Q: A share of Koko's common stock just paid a dividend of $1.00. If the expected long-run growth rate…
A: Given information: Dividend paid (D0) : $1 Growth rate (g) : 5.4% Required return (r) : 11.4%
Q: What will be the nominal rate of return on a preferred stock with a $100 par value, a stated…
A: Given details are : Par value = $100 Dividend rate = 8% Dividend amount = $100 * 8% = $8 Current…
Q: What is the current price of a share of stock when the current dividend is $4.75, the growth rate is…
A: Current price of a share of stock is referred as current price or value of the share which is the…
Q: A preferred stock from DLC pays $3.00 in annual dividends. If the required return on the preferred…
A: In this question we need to compute the value of preferred stock. While valuing the preferred stock…
Q: What is the current price of a share of stock when the current dividend is P5, the growth rate is…
A: The current price of the stock can be estimated with the help of dividend discount model
Q: What is the dividend growth rate for a stock that sells for $48, with a 12% discount rate and…
A: Dividend growth rate model: The formula for dividend growth model is as follows: Where : D=Dividend…
Q: .If a stock pays a Tk.6 dividend this year, and the dividend has been growing 4%annually, then what…
A: Current Dividend = Tk.6 Growth rate = 4% Required rate of return = 11%
Q: Assume that a stock is giving $2 dividends and the expected rate of return is 10%, how much the…
A: Expected return is the return expected on the financial securities using some model like capital…
Q: • You observe a stock price of $18.75, You expect a dividend growth rate of 5% and the most recent…
A: As per divided discount model Required return = (DPS1/Po) + g Where's DPS1 = Expected Divided for…
Q: What is its dividend yield?
A: Ans 7.50%
Q: What is the total rate of return on the stock? b. What are the dividend yield and percentage…
A: Dividend Yield: It represents the portion of the firm's share price that pays dividends. Hence, it…
Q: The expected constant-growth rate of dividends is % for a stock currently priced at $79, that just…
A: Growth rate = Required return - ( Dividend1 / Price0 ) Return = [ Dividend + ( Sale price - Purchase…
Q: A share of common stock has just paid a dividend of $2.00. If the expected long-run growth rate for…
A: This question require us to calculate the price of the stock. Lookin at the information it is clear…
Q: will be the price of the stock if its dividend per share is at $100 and the dividend yield is at…
A: Dividend yield represents percentage of dividend earned over stock price.
Q: What is the current price of a share of stock when last year’s dividend was P3, the growth rate is…
A: To calculate the current price of stock we will use the below formula Current price of stock =…
Q: a) What is the required rate of return for the stock? b) What are the dividends for 4 years? c) What…
A: Market risk premium denotes the extra return that a stock earns as compared to the market return.…
Q: A stock has a market price of $33.45 and pays a $.95 dividend. What is the dividend yield?
A: Stock market = price Dividend =0.95 Dividend Yield= Annual dividend / price per share
Q: A stock is selling today for $50 per share. At the end of the year, it pays a dividend of $2 per…
A: This question is asking about the dividend yield, capital gain yield, and total yield on the…
Q: The following graph shows the value of a stock’s dividends over time. The stock’s current dividend…
A: Given, Stock's current dividend = $1.00 per share Growth rate (R) = 3.50% or 0.035 Present value…
Q: A stock is selling today for $60 per share. At the end of the year, it pays a dividend of $3 per…
A: The stock return refers to the difference between the closing stock price and the initial stock…
Q: a stock is selling for 9.5 and pays dividend of 0.1 cents , growth rate is 0.035 what is the…
A: The formula used is shown:
Q: a. What is the value of the stock if the current dividend is $1.30, the first stage growth is 18…
A: The Present value is the present worth of amount that will be paid or received in future.
Q: What is the current price of a share of stock when the current dividend is P4.75, the growth rate is…
A: As per Gordon model, Current price of stock or P0 = D1/(r - g) where D1 is the dividend yet to be…
Q: 1. A stock just paid a dividend of $1.56, has a required rate of return of 13%, and a constant…
A: In this question we require to compute the price of stock from following details: Just paid Dividend…
Q: What price would you expect to pay for a stock with a 13% required rate of return, 4% constant rate…
A: The price to be paid can be calculated using the Dividend Growth Model.
Q: What is the value of a preferred stock thst pays an annual dividend of $4.50 a share and competitive…
A: Preferred stock are the stock which has property of both common stock and debt. It has higher claims…
Q: Suppose the current dividends on a stock are $4.7 per share and dividends are expected to increase…
A: The proce of share will be calculated with the help of following formula (Gorden's Model) P0 = D1 ÷…
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- If the interest rate is approximately equal to the growth rate of dividends, the price of a stock will be close to Select one: a. infinity O b. It is impossible to tell based on the information above O c. 100000 O d. 0Suppose a share of preferred stock sells for $50.25 and pays a dividend of $9.26 each period. What is the discount rate?3. What is the intrinsic value of a share of stock if expected dividends are $8/share and the expected price year is $90/share? Assume a discount rate of 10%. What is the expected return and what should be the decision from an investor?. in 1
- A stock has a market price of $33.45 and pays a $.95 dividend. What is the dividend yield?(3) According to the Dividend-Discount Model Equation, the price of the stock today (Po) is equal to the present value of all of the expected future dividends (e.g., Divi, Div..., Divx) investors will receive, along with the cash flow from the sale of the stock (i.e., Ps) in year N (see, the following Equation). Div Div ₂ + L + 1+FE (1+E)² Po = + PN Div N (1+re)^ *(1+r)^ List three practical challenges (i.e., limitations) when using the Equation to calculate stock price (Po) in practice.1. (a) What are the two components of most stocks’ expected total return?(b) How does one calculate the capital gains yield and the dividend yield of a stock?(c) If D1 = RM3.00, P0 = RM50, and the expected P at t=1 is equal to RM52, what are the stock’s expected dividend yield, capital gains yield, and total return for the coming year?2. (a) Are stock prices affected more by long-term or short-term performance? Explain.(b) A stock is expected to pay a dividend of RM2 at the end of the year. The required rate of return is rs = 12%. What would the stock’s price be if the growth rate were 4%?What would the stock’s price be if the growth rate were 0%?3. If D0 = RM4.00, rs = 9%, and g = 5% for a constant growth stock, what are the stock’s expected dividend yield and capital gains yield for the coming year?4. (a) Explain what is meant by the terms “horizon (terminal) date” and “horizon (terminal) value”.(b)Suppose D0 = RM5.00 and rs = 10%. The expected growth rate from Year 0 to Year 1 (g0…
- Suppose rRF = 4%, rM = 12%, and bi = 1.6. What is ri, the required rate of return on Stock i? Round your answer to one decimal place. %The dividend-growth model may be used to value a stock: Round your answers to the nearest cent. a. What is the value of a stock if: Do = $2.30 k = 8% 9 = 5% V = Do(1+g) k-9 $ b. What is the value of this stock if the dividend is increased to $4.30 and the other variables remain constant? $ c. What is the value of this stock if the required return declines to 6 percent and the other variables remain constant? $ d. What is the value of this stock if the growth rate declines to 3 percent and the other variables remain constant? $ e. What is the value of this stock if the dividend is increased to $2.90, the growth rate declines to 3 percent, and the required return remains 8 percent? $The dividend-growth model may be used to value a stock: Do(1+9) V = k - g Round your answers to the nearest cent. a. What is the value of a stock if: Do = $3.10 k = 12% 9 = 8% b. What is the value of this stock if the dividend is increased to $4.30 and the other variables remain constant? $ c. What is the value of this stock if the required return declines to 9 percent and the other variables remain constant? d. What is the value of this stock if the growth rate declines to 5 percent and the other variables remain constant? e. What is the value of this stock if the dividend is increased to $3.70, the growth rate declines to 5 percent, and the required return remains 12 percent? $
- What is the required return on preferred stock, rPS, if the stock has an annual dividend of $9 and a price of $100?(a) Compute the expected book value per share at time 1. (b) Compute the expected earnings per share of DTI at time 2. (c) Compute the expected value of the ex-dividend stock price at time 2. (d) Compute the expected value of the ex-dividend stock price at time 0. (e) Compute the expected return (over a single-period) on the stock of DTI at time 0 (in %).1.If a stock is selling at Tk.365 and the current dividends is Tk.35. What might themarket assuming the growth rate of dividends for this stock if the rate of required return is 14%?
