Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Burnett Corp. pays a constant $22 dividend on its stock. The company will maintain this dividend for the next 14 years and will then cease paying dividends forever. |
| If the required return on this stock is 7 percent, what is the current share price? |
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- Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next nine years because the firm needs to plow back its earnings to fuel growth. The company will pay a dividend of $11 per share 10 years from today and will increase the dividend by 4 percent per year thereafter. If the required return on this stock is 12 percent, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)arrow_forwardABC Inc. will be in business for only the next 10 years and pays an annual dividend of $2.65 for those ten years? What is the present value of a share of stock for this company if we want a 7% return on the stock? O A. None of the above. B. $18.61 OC. $69.44 O D. $526.96arrow_forwardCorporation pays a constant $12 dividend on its stock. the company will maintain this dividend for the next 4 years and then it will cease paying dividends forever. If the required return on this stock is 14%, what is the current share price? Please don't skip and give answerarrow_forward
- Chamberlain Corporation is expected to pay the following dividends over the next four years: $13.20, $9.20, $8.20, and $3.70. Afterward, the company pledges to maintain a constant 4% growth rate in dividends forever. If the required return on the stock is 12%, what is the current share price? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.)arrow_forwardcompany presently pays no dividend. You anticipate company will pay an annual dividend of $1.00 per share two years from today and you expect dividends to grow by 3% per year thereafter. If company’s equity cost of capital is 14%, then what is a fair value for a share of company today? Enter answer rounded to the nearest cent.arrow_forwardXYZ Inc., has an odd dividend policy. The company has just paid a dividend of $11.00 per share and has announced that it will increase the dividend by $9.00 per share for each of the next four years, and then never pay another dividend. If you require a return of 16 percent on the company’s stock, how much will you pay for a share today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)arrow_forward
- New Gadgets, Incorporated, currently pays no dividend but is expected to pay its first annual dividend of $4.90 per share exactly 7 years from today. After that, the dividends are expected to grow at 3.5 percent forever. If the required return is 11.3 percent, what is the price of the stock today?arrow_forwardMetallica Bearings, Incorporated, is a young start-up company. No dividends will be paid on the stock over the next 14 years because the firm needs to plow back its earnings to fuel growth. The company will pay a dividend of $8 per share 15 years from today and will increase the dividend by 5 percent per year thereafter. If the required return on this stock is 11 percent, what is the current share price? Multiple Choice O O O $27.87 $31.86 $30.93 $32.48 $29.39arrow_forward10 Burnett Corporation pays a constant $22 dividend on its stock. The company will maintain this dividend for the next 13 years and will then cease paying dividends forever. If the required return on this stock is 7 percent, what is the current share price?arrow_forward
- Shirley and Sons pays no dividend at the present time. The company plans to start paying an annual dividend in the amount of $.30 a share for two years commencing two years from today. After that time, the company plans on paying a constant $1 a share dividend indefinitely. Given a required return of 14% p.a., what is the value of this stock?arrow_forwardGoulds Corp. pays a constant $9.05 dividend on its stock. The company will maintain this dividend for the next 9 years and will then cease paying dividends forever. If the required return on this stock is 10%, what is the current share price? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Current share price LAarrow_forwardBowman Corp pays a constant $13 dividend on its stocks. The company will maintain this dividend for the next eight years and will then cease paying dividends forever. If the required returnon this stock is 9.00 percent, what is the current share price?arrow_forward
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