Apple Inc. issued AAPL stock. The stock has a face value of $30. The company currently pays a dividend of $3.6 per share. It is estimated that the company's dividend will grow at a constant rate of 10%. The stock's required rate of return is 14%. What is your estimation of the stock's current price?

Apple Inc. issued AAPL stock. The stock has a face value of $30. The company currently pays a dividend of $3.6 per share. It is estimated that the company's dividend will grow at a constant rate of 10%. The stock's required rate of return is 14%. What is your estimation of the stock's current price?

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

A dividend of $3.45 was paid last year by Blue Lightening and the company anticipates this will grow at 4% for the foreseeable future. The appropriate discount rate (expect return) for the stock is 12.7%, Blue Lightening's stock price is closest to: Question 4 options: A) $41.24. B) $28.25. C) $39.66.
A stock just paid a dividend of $1.69. The dividend is expected to grow at 23.51% for five years and then grow at 3.84% thereafter. The required return on the stock is 12.81%. What is the value of the stock? Answer format: Currency: Round to: 2 decimal places.
A stock just paid a dividend of $1.51. The dividend is expected to grow at 21.84% for two years and then grow at 3.90% thereafter. The required return on the stock is 11.25%. What is the value of the stock?
The stock price of QRS Inc. is $68. Investors require 11% return on similar stocks and QRS Inc. plans to pay a dividend of $3.85 next year. What growth rate is expected for the stock?
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A stock just paid a dividend of $1.05. The dividend is expected to grow at 27.09% for three years and then grow at 4.20% thereafter. The required return on the stock is 10.14%. What is the value of the stock?
Ritter Sports Industries has preferred stock outstanding with a par value of $100. The stock pays a perpetual quarterly dividend of $0.95 and has a current price of $71.25. What is the nominal rate of return on the preferred stock?
Big Oil, Inc. has a preferred stock outstanding that pays a $8 annual dividend. If investors’ required rate of return is 10 percent, what is the market value of the shares? Round your answer to the nearest cent. $ If the required return declines to 8 percent, what is the change in the price of the stock? Round your answer to the nearest cent. The price by $ .
A biotechnology company's stock is currently selling for $48.35 per share. The earnings per share are $2.14, and the dividend is $1.80. (a) What is the current yield of the stock (as a %)? (Round your answer to the nearest tenth of a percent.) % (b) What is the price-earnings ratio? (Round your answer to the nearest whole number.)
YNA is expected to pay a dividend of $1.0 in Year 1 and $1.2 in Year 2. Analysts expect the price of YNA shares to be $19 two years from now. The risk-free rate of return is 4%, and the expected return on the market portfolio is 14%. The beta of the stock is 1.2. Compute the intrinsic value of the stock. Round your answer to two decimal places and enter without the dollar sign.
A biotechnology company's stock is currently selling for $48.35 per share. The earnings per share are $2.14, and the dividend is $1.60. (a) What is the current yield of the stock (as a %)? (Round your answer to the nearest tenth of a percent.) % (b) What is the price-earnings ratio? (Round your answer to the nearest whole number.)
CDB stock is currently priced at $57.24. The company will pay a dividend of $6.01 next year and investors require a return of 8.35 percent answer in percentage

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