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 $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 percent, what is the current share price?
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- A young start-up company will not pay dividends on its stock over the next 9 years. The company will pay a dividend of $9 per share 10 years from today and will increase the dividend by 4 percent per year thereafter. If the required rate of return is 12 percent, what is the current share price? Please use a HP 10bii+ Financial Calculatorarrow_forwardChamberlain 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_forwardOZ Minerals Ltd. is a young start-up company. No dividends will be paid on the stock over the next 9 years because the firm needs to plow back (reinvest) its earnings to fuel growth. The company will pay a dividend of $32 per share 10 years from today and will increase the dividend by 5 per cent per year thereafter. If the required return on this stock is 16 per cent, what is the current share price?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_forwardJJ Industries will pay a regular dividend of $3.10 per share for each of the next four years. At the end of four years, the company will also pay out a liquidating dividend. If the discount rate is 11 percent, and the current share price is $67, what must the liquidating dividend be? (Do not round intermediate calculations. Round your answer to 2 decimal places.)arrow_forward
- Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next 10 years because the firm needs to plow back its earnings to fuel growth. The company will then pay a dividend of $13.50 per share 11 years from today and will increase the dividend by 5.25 percent per year thereafter. If the required return on this stock is 13.25 percent, 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 pricearrow_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_forwardShirley 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_forward
- Goulds 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_forwardMetallica Bearings, Incorporated, 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 $12 per share 10 years from today and will increase the dividend by 6 percent per year thereafter. If the required return on this stock is 11 percent, 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 pricearrow_forward
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