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- You expect a company to pay a dividend of 2.50 next year and 3.50 a share for the following 2 years. At that point, you expect that the dividend will increase by 4% every year. If your required return is 8%, what would you pay for the stock today? USE EXCELCape Corp. Will pay a dividend of $2.64 next year. The company has stated that it will maintain a constant growth rate of 4.5% a year forever if you want to return of 12%, how much will you pay for the stock? What if you want a return of 8%? What does it tell you about the relationship between the required rate of return and the stock price?You are considering purchasing a stock that is expected to pay a dividend of $5 at the end of the year. The dividends for this firm are expected to grow at a constant rate of 5%. Based on the riskiness of the stock, you require a return of 9%. If you pay $73 for this stock today, what is your expected return?
- Your first task in your new job at an investment bank is to price a new stock issue. You expect the stock will pay a dividend of $2 per share starting 1 year after issue and that dividends will grow at 3.0% per year thereafter. The return on similar stocks is 5.5%. a. What price would you assign to the stock?Cape Corp. Will pay a dividend of $2.64 next year. The company has stated that it will maintain a constant growth rate of 4.5% a year forever if you want to return of 12%, how much will you pay for the stock? What if you want a return of 8%? What does it tell you about the relationship between the required rate of return and the stock price? -If procedure and answer could be typed in computer i would appreciate it!!!You are valuing a stock. If you expect the dividend one-year from today (at t=1) to be $3.00 dividend, and you expect dividends to grow a rate of 30% each year for the following 10 years (t=2 to 11). After that, dividends are expected to grow at a constant 7%. What would you estimate the stock price to be if the required rate of return is 10%?
- you are analyzing Citi as a potential stock investment. You're expecting them to pay a dividend of $2.50 next year (one year away) and then $3.50 for the year after. After the $3.50 dividend is paid you expect dividends will grow at a constant rate of 5% per year. You are expecting a return of 10%, what price would you be willing to pay for a share of Citi?you have been offered the following investment. if your required rate of return is 20% p.a. how much would you be prepared to pay? ordinary shares which recently paid a dividend of K0.75 per share. the dividend has been growing at 10% p.a. and this rate is expected to continue for the next 3 years. after this time, the growth rate is expected to slow to 5% for the forseeable futureIn one year, a firm will pay a common stock dividend of $6.35. The dividends have been growing at 6% per year. Based on analysts' forecasts, you predict that you will be able to sell your stock for $48 per share after one year. If you require a rate of return of 13 percent on your stock, how much would you be willing to pay now for a share of the stock? O $51.27 O $45.85 O $42.11 O $58.54 O $48.10
- Candy Co is expected to pay dividends of 2.00 per share for the next two years (dividend in year 1 will be 2.00 and dividends in year two will also be 2.00). In the end of this two-year period and thereafter the constant growth rate of stock dividends is expected as 3%. The required rate of return is 13%. What should be the stock price of Candy co today? Answer Choices 20.60 24.33 19.47 22.60A firm is expected to pay $1,6 dividend per share next year. The dividend is expected to grow at a 30% for 2 years and thereafter, decline and stay at a constant rate of 5%. The required rate of return is 11%. Find the stock price today.You are considering purchasing stock in a company that is expected to pay a $ 3.34 dividend later this year and you require a return of 7.79%. Assume the dividend will continue to be paid each year thereafter and will grow every year as described below. C What is the maximum price you would be willing to pay if you expect a growth rate of 2%? $ 58.84 (Enter as a whole number with two decimal places, such as 10.19.) What is the maximum price you would be willing to pay if you expect a growth rate of 5%? $ 125.70 What is the maximum price you would be willing to pay if you expect a growth rate of 7%? $452.38 What is the relationship between the price of a stock and the firm's growth rate? O A. The stock price is exactly equal to the growth rate times the dividend. B. As the growth rate investors expect increases, the price they are willing to pay also increases. OC. As the growth rate investors expect increases, the price they are willing to pay decreases. O D. There is no relationship.