A company currently pays a dividend of $1.6 per share (D0 = $1.6). It is estimated that the company's dividend will grow at a rate of 23% per year for the next 2 years, and then at a constant rate of 5% thereafter. The company's stock has a beta of 1.8, the risk-free rate is 8.5%, and the market risk premium is 4.5%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to the nearest cent.

Estimate the annual required rate of return for BTO stock, using the Constant Dividend Growth Model. BTO just paid an annual dividend of $18.78 per share, and the concensus analyst estimate is that the dividend will grow at 5.5% each year. The current market value of BTO stock is $145.36 per share. Answer as a % to 2 decimal places (e.g., 12.34% as 12.34).

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Integrative Risk and valuation Giant Enterprises' stock has a required return of 14.8%. The company, which plans to pay a dividend of $2.93 per share in the coming year, anticipates that its future dividends will increase at an annual rate consistent with that experienced over 2013-2019 period, when the following dividends were paid: a. If the risk-free rate is 5%, what is the risk premium on Giant's stock? b. Using the constant-growth model, estimate the value of Giant's stock. (Hint: Round the computed dividend growth rate to the nearest whole percent.) c. Explain what effect, if any, a decrease in the risk premium would have on the value of Giant's stock. a. If the risk-free rate is 5%, the risk premium on Giant's stock is%. (Round to one decimal place.) C

Quantitative Problem: Barton Industries expects next year's annual dividend, D1, to be $1.70 and it expects dividends to grow at a constant rate gL = 5%. The firm's current common stock price, P0, is $23.60. If it needs to issue new common stock, the firm will encounter a 5.7% flotation cost, F. Assume that the cost of equity calculated without the flotation adjustment is 12% and the cost of old common equity is 11.5%. What is the flotation cost adjustment that must be added to its cost of retained earnings? Round your answer to 2 decimal places. Do not round intermediate calculations. % What is the cost of new common equity? Round your answer to 2 decimal places. Do not round intermediate calculations. %

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Nonconstant Dividend Growth Valuation A company currently pays a dividend of $3.2 per share (D0 = $3.2). It is estimated that the company's dividend will grow at a rate of 25% per year for the next 2 years, and then at a constant rate of 6% thereafter. The company's stock has a beta of 1.6, the risk-free rate is 10%, and the market risk premium is 7%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to the nearest cent. $

Integrative-Risk and valuation Giant Enterprises' stock has a required return of 14.2%. The company, which plans to pay a dividend of $1.84 per share in the coming year, anticipates that its future dividends will increase at an annual rate consistent with that experienced over 2013-2019 period, when the following dividends were paid: E. a. If the risk-free rate is 6%, what is the risk premium on Giant's stock? b. Using the constant-growth model, estimate the value of Giant's stock. (Hint: Round the computed dividend growth rate to the nearest whole percent.) c. Explain what effect, if any, a decrease in the risk premium would have on the value of Giant's stock. a. If the risk-free rate is 6%, the risk premium on Giant's stock is %. (Round to one decimal place.) b. Using the constant-growth model, the value of Giant's stock is $ . (Round to the nearest cent.) c. Explain what effect, if any, a decrease in the risk premium would have on the value of Giant's stock. (Select from the…