6. Calculate the price of a dividend paying stock using the following information, assuming the price is equal to the present value of all future dividends one will receive from owning the stock. (Hint: treat the stock as a growing perpetuity) Dividend $4.50 Growth rate 2% Required return 12% *

Calculation of dividends price

PlCalculate dividend price..

(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.

An investor expects a14% return on a $ 50 stock that pays a dividend of  $ 2.50. Was is the implied capital gain rate on the price appreciation?

The following table shows the expected dividend payments and required rate of return of Globex Corp. Clearly explain the assumptions, if any, you are using to solve below question(s). 2021 2023 20244 2022 $4 Yeara 2025 20264 20274 ket Dividend $ 0.40 0.44 0.48 $ 0.53 $ 0.59 $ 0.61 $ 0.63 12%e i. Calculate value of Globex Corp share in 2021. ww mm

The cost of equity and dividends are known to the picture.calculate the value of Ve, according to the multi-period dividend discount model

Estimate its cost of common equity, Maxell and Associcates recently hired you. Obtain the following data, D0=$0.90, P0= $27.50, gl=7% constant. Based on the dividend grwoth model, What is the cost of common for reinvested earnings? (10.50%,9.29%,10.08%,9.68%,10.92%)

Most recent dividend (D0) paid $5.16, if anticipated growth of 4.8 % is expected to be constant into the future, what is the fair value of the stock if the required return (rs) = 13.8 percent?  Answer to two decimal places.

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