4. Mouser Industries' common stock paid $1.32 in dividend last year, and is expected to grow at anannual rate of 7% for the near future. What is the value of the stock if the current rate of return is 11%

As per the Constant Dividend growth model,Value of the stock = D0 x (1+g) / (r - g)whereD0 = Recent…

Answered: 4. Mouser Industries' common stock paid…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 2P

See similar textbooks

Similar questions

Assume that Temp Force is a constant growth company whose last dividend (D0, which was paid yesterday) was 2.00 and whose dividend is expected to grow indefinitely at a 6% rate. (1) What is the firms current estimated intrinsic stock price? (2) What is the stocks expected value 1 year from now? (3) What are the expected dividend yield, the expected capital gains yield, and the expected total return during the first year?
Suppose a company is expected to pay a dividend of $3.97 next year. The dividend is expected to grow at 6.21% each year. If the stock is currently selling for $260.26, what is the required rate of return on the stock?
1.If a stock pays a Tk.6 dividend this year, and the dividend has been growing 4%annually, then what will be the intrinsic value of the stock, assuming a requiredrate of return of 11%?
CanPro Co. is expecting that its dividend for this coming year will be $1.2 a share and that all future dividends are expected to increase by 3 percent annually. What is the required return of this stock if the current market price of the stock is $17? a. 11.00% b. 9.67% c. 11.74% d. 10.06%
CanPro Co. is expecting that its dividend for this coming year will be $1.2 a share and that all future dividends are expected to increase by 3 percent annually. What is the required return of this stock if the current market price of the stock is $17?
Whizcom Inc. is expected to pay a dividend of $1 next period. Dividends are expected to grow at 2% per year and the investors require a return of 12%. i) Compute the current stock price for Whizcom Inc.ii) What would be the likely stock price in year 5?iii) What would be per annum rate of return implied by a change in prices from time 0 to time 5?
You are evaluating the stock of XYZ Corp. Suppose that the required rate of return for the firm is 20%. Suppose future dividends are expected to grow at 10% per year. The current stock price of the firm is $55. What is the expected dividend per share next year (D1)? a. $4.5 b. $4.0 c. $5.0 d. $5.5
The market price of a stock is $21.90 and it is expected to pay a dividend of $1.52 next year. The required rate of return is 11.04%. What is the expected growth rate of the dividend? Submit
The last dividend paid by ABC company is 5 TL. The dividend is expected to grow by 4% next year, 6% in the second year, % 3 third year and 2% in the following years. If the expected return rate of investors (k) is 10%. What is the value of this stock today (P0)?

Recommended textbooks for you

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

Corporate Fin Focused Approach

Finance

ISBN:

9781285660516

Author:

EHRHARDT

Publisher:

Cengage

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Intermediate Financial Management (MindTap Course…

Finance

ISBN:

9781337395083

Author:

Eugene F. Brigham, Phillip R. Daves

Publisher:

Cengage Learning

Corporate Fin Focused Approach

Finance

ISBN:

9781285660516

Author:

EHRHARDT

Publisher:

Cengage

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

SEE MORE TEXTBOOKS

4. Mouser Industries' common stock paid $1.32 in dividend last year, and is expected to grow at an annual rate of 7% for the near future. What is the value of the stock if the current rate of return is 11%