Blarritz Corp. is growing quickly. Dividends are expected to grow at a rate of 30 percent for the next three years, with the growth rate falling off to a constant 6 percent thereafter. The required return is 13 percent and the company just paid a dividend of $2.75. What are the dividends each year for the next four years? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Year 1 Year 2 Year 3 Year 4 What is the share price in three years? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Share price in three years What is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current share price

Blarritz Corp. is growing quickly. Dividends are expected to grow at a rate of 30 percent for the next three years, with the growth rate falling off to a constant 6 percent thereafter. The required return is 13 percent and the company just paid a dividend of $2.75. What are the dividends each year for the next four years? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Year 1 Year 2 Year 3 Year 4 What is the share price in three years? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Share price in three years What is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current share 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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Burton Corp. is growing quickly. Dividends are expected to grow at a rate of 18 percent for the next three years, with the growth rate falling off to a constant 4.6 percent thereafter. The required return is 16 percent and the company just paid a dividend of $2.75. What are the dividends each year for the next four years? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Year 1 Year 2 Year 3 Year 4 $ S $ $ What is the share price in three years? (Do not round intermediate calculations and round your answer to 2 decimal placés, e.g 32.16.) Share price in 3 years $ What is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.1. Current share price
Cortez, Inc., is expecting to pay out a dividend of $2.5 next year. After that it expects its dividend to grow by 25 cents per year for the next 3 years. what is the present value of dividends over the four year period if the required rate of return is 9 percent? (do not round intermediate calculations. round final answer to two decimal places.) $11.88 $11.06 $7.61 $9.23 none of these
Cape Corp. will pay a dividend of $2.70 next year. The company has stated that it will maintain a constant growth rate of 4.75 percent a year forever. a. If you want a return of 16 percent, how much will you pay for the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. If you want a return of 11 percent, how much will you pay for the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Holtzman Clothiers's stock currently sells for $35 a share. It just paid a dividend of $2.25 a share (i.e., D0 = $2.25). The dividend is expected to grow at a constant rate of 9% a year. What is the required rate of return? Round your answer to two decimal places. Do not round your intermediate calculations.
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Beasley Ball Bearings paid a $4 dividend last year. The dividend is expected to grow at a constant rate of 5 percent over the next four years. The required rate of return is 12 percent (this will also serve as the discount rate in this problem). Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. Compute the anticipated value of the dividends for the next four years. (Do not round intermediate calculations. Round your final answers to 2 decimal places.) b. Calculate the present value of each of the anticipated dividends at a discount rate of 12 percent. (Do not round intermediate calculations. Round your final answers to 2 decimal places.) c. Compute the price of the stock at the end of the fourth year (P4). (Do not round intermediate calculations. Round your final answer to 2 decimal places.) d. Calculate the present value of the year 4 stock price at a discount rate of 12 percent. (Do not…
Cape Corp. will pay a dividend of $4.00 next year. The company has stated that it will maintain a constant growth rate of 5 percent a year forever. a. If you want a return of 17 percent, how much will you pay for the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. If you want a return of 11 percent, how much will you pay for the stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Stock price b. Stock price
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