A stock is trading for a share price of $21.99. You expect it to pay a dividend of $1.58 exactly one year from now, and you expect future annualdividends to grow at 2.9% per year indefinitely. What is the stock's required rate of return? Enter your answer as a decimal and show fordecimal places. That is, if your answer is 12.5%, enter .1250.Type your answer...

Current price of stock is the price which can be paid for purchase of the stock. It is also called…

Answered: A stock is trading for a share price of…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

Consider a stock that wil have price of $31 54 one year from now and pay a dividend of $3.28 in one year. The expected rate of returm is 3.5%. What is the current price of the stock? Enter your response below rounded to 2 DECIMAL PLACES. Number
A stock is expected to pay a dividend of $6.3 in two years and a $4.6 in three years. You are hoping that you can sell it for $100 at that time. If the required return is 9.3%, what is the stock's value? Round to 2 decimal places. Answer:
A stock is expected to pay a dividend of $1.26 at the end of the year. The required rate of return is rs = 10.82%, and the expected constant growth rate is g = 1.3%. What is the stock's current price?Round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72.
A stock is expected to pay a dividend of $1.99 at the end of the year. The required rate of return is rs = 13.82%, and the expected constant growth rate is g = 8.0%. What is the stock's current price?Round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72. A. $39.61 B. $29.71 C. $34.14 D. $42.68 E. $35.51
A stock is expected to pay a dividend of $1.27 at the end of the year. The required rate of return is rs = 14.57%, and the expected constant growth rate is g = 2.6%. What is the stock's current price?Round your answer to two decimal places. For example, if your answer is $345.6671 round as 345.67 and if your answer is .05718 or 5.7182% round as 5.72. Group of answer choices
You purchase 100 shares of stock for $47 a share. The stock pays a $3 per share dividend at year - end. What is the rate of return on your investment for these end-of-year stock prices? What is your real (inflation - adjusted) rate of return? Assume an inflation rate of 4%. (Round your answers to 2 decimal places. Use the minus sign for negative numbers if it is necessary.) a) End of year stock price = $43 Real rate of return = ? Real rate= ? b) End of year stock price = $47 Real rate of return= ? Real rate= ? c) End of year stock price = $50 Real rate of return= ? Real rate = ?
A stock is expected to pay a dividend of $2.25 at the end of the year (i.e., D1 = $2.25), and it should continue to grow at a constant rate of 8% a year. If its required return is 14%, what is the stock's expected price 4 years from today? Round your answer to two decimal places. Do not round your intermediate calculations.
You purchase 115 shares of stock for $53 a share. The stock pays a $7 per share dividend at year- end. What is the rate of return on your investment for these end-of-year stock prices? What is your real (inflation-adjusted) rate of return? Assume an inflation rate of 5%. (Round your answers to 2 decimal places. Use the minus sign for negative numbers If it is necessary.) a. End-of-year stock price = $48 Rate of return Real rate b. End-of-year stock price = $53 Rate of return Real rate c. End-of-year stock price = $60 Rate of return Real rate
A stock is expected to pay a dividend of $2.5 one year from now, and the same amount every year thereafter. The stock's required return (indefinitely) is expected to be 11.6%. The stock's predicted price exactly 5 years from now, P5, should be $_______________. Do not round any intermediate work, but round your final answer to 2 decimal places (ex: $12.34567 should be entered as 12.35).
You are analyzing a stock. The stock's most recent dividend paid was $2.6 per share. You expect that the stock dividends will grow at 11% for the next 3 years (until t = 3), followed by a long-term stable growth rate of 1.6% per year. The required rate of return on the stock is 6%. What is the intrinsic value of the stock? Note: Round your final answer to 2 or more decimal places. Do not write any symbols like $.
Consider an example. Assume a share of preferred stock with the following characteristics: Par value $100 Dividend rate 3.0% per year Payment schedule semiannual Maturity date You are analyzing this preferred stock for possible purchase. Your required rate of return on this stock is 5% per year, compounded semiannually. Draw a time line showing the expected dividends for this preferred stock. Calculate the value of this preferred stock based on the required rate of return. Assume that the current market price for this preferred stock is $75 per share. Calculate the expected return based on the market price. Should you invest in the stock? Why or why not? Be sure to use your results from BOTH parts B and C above. You are analyzing a share of XYZ…
You are evaluating a stock that just paid a dividend of $4.6 Dividends are expected to grow at a constant rate of 4.8% for long time into the future. The required rate of return on the stock is 9.8%. What is the value of this stock? (round your answer to 2 decimal places, ignore the S sign in your answer)

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