A firm will pay an annual dividend of $6 on its common stock in one year, and its dividend will grow at a fixed growth rate every year in the future. The current stock price is $88 per share. The cost of equity of this firm is 12 percent. What is the growth rate of the dividend? A. 7.15% B. 6.82% C. 5.18% D. 4.06%

Topstone Industries just paid an annual dividend of $2.00 per share this year. This dividend, along with the firm's earnings, is expected to grow at a rate of 5% per annum forever. If the current market price for a share of Topstone is $38.61, what is the implied cost of equity? O A. O B. 10.44% O D. 11.22% O C. 10.71% 10.18% OE. 5.36% 7

3 02:29:29 The stock of Payout Corp. will go ex-dividend tomorrow. The dividend will be $1 per share, and there are 50,000 shares of stock outstanding. The market-value balance sheet for Payout is shown below. Assets Liabilities and Equity Cash Fixed assets $300,000 950,000 Equity $1,250,000 So far, price of the share today is $25 per share and it will sell at $24 per share for tomorrow. Now suppose that Payout announces its intention to repurchase $50,000 worth of stock instead of paying out the dividend. a. What effect will the repurchase have on an investor who currently holds 50 shares and sells 2 of those shares back to the company in the repurchase? Total value of the position b. What effect will the initial cash dividend payment have on the same investor? Total value of the position $

Jiffy Co. expects to pay a dividend of $3.00 per share in one year. The current price of Jiffy common stock is $60 per share. What is the cost of internal common equity (retained earnings) if the long-term growth in dividends is projected to be 9 percent indefinitely? a. 15 percent b. 14 percent c. 16 percent d. 13 percent

This year, Hope Corporation paid a dividend of $0.50 per share.  The company expect dividends to increase by 4.5% each year forever.  If investors require a return of 12%, what is the value of a Hope Corporation share today? a. $6.67 b. $6.97 c. $4.17 d. $7.47 e. $0.50

Cullumber Wok Co. is expected to pay a dividend of $1.70 one year from today on its common shares. That dividend is expected to increase by 5.00 percent every year thereafter. If the price of Cullumber common stock is $17.00, what is the cost of its common equity capital? - Cost of common equity =?%

Assume that Stock X is fairly priced today. Stock X just distributed a per share dividend of $1. It is expected that the company will increase its dividend by 20% in the coming year, 15% in the second year, 10% in the third year, and 5% in the fourth year. Starting from the fifth year, the company will maintain the dividend growth rate to be 5% per year forever. How much is Stock X worth today if its equity cost of capital is 10%?   With clear calculation and formula

B

4. The dividends that Firm A pays to its stockholders are expected to grow at 18% a year for the next nine years. From t=9 onwards, the growth rate in dividends will drop to 13.5% per year, and the firm expects to be able to sustain it at this level. Assuming that the market capitalization rate is 18% a year, work out the value of the firm assuming that the dividend expected to be paid at t=1 is $4.50.

Ra