(Common stock valuation) Wayne, Inc.'s outstanding common stock is currently selling in the market for $17. Dividends of $1.87 per share were paid last year, return on equity is 23 percent, and its retention rate is 25 percent. a. What is the value of the stock to you, given a required rate of return of 16 percent? b. Should you purchase this stock?

Iron Manufacturers made two announcements concerning its common stock today. First, the company announced that the next annual dividend will be $2.10 a share. Secondly, all dividends after that will increase by 2.5 percent annually. What is the maximum amount you should pay to purchase a share of this stock today if you require a 10 percent rate of return? Solve using Excel

​(Common stock​ valuation)  Assume the​ following:   •   the​ investor's required rate of return is 13.5 ​percent, •   the expected level of earnings at the end of this year ​(E1​) is ​$6​, •   the retention ratio is 40 ​percent, •   the return on equity ​(ROE​) is 15 percent​ (that is, it can earn 15 percent on reinvested​ earnings), and •   similar shares of stock sell at multiples of 8.000 times earnings per share.   ​Questions:   a.  Determine the expected growth rate for dividends. b.  Determine the price earnings ratio ​(P​/E1​). c.  What is the stock price using the ​P/E ratio valuation​ method? d.  What is the stock price using the dividend discount​ model? e.  What would happen to the ​P/E ratio ​(P​/E1​) and stock price if the company increased its retention rate to 75 percent​ (holding all else​ constant)? What would happen to the ​P/E ratio ​(P​/E1​) and stock price if the company paid out all its earnings in the form of​ dividends? f.  What have you learned about…

You bought a stock one year ago for $48.32 per share and sold it today for $44.64 per share. It paid a $1.14 per share dividend today. a. What was your realized return? b. How much of the return came from dividend yield and how much came from capital gain?

Carpenter, Inc. has perfected stock that pays a dividend of $2.25 at the end of each year. If your required rate of return is 9.25%, what is the value of this preferred stock?

You are considering purchasing stock in Canyon Echo. You feel the company will increase its dividend at 3.3 percent indefinitely. The company just paid a dividend of $3.80 and you feel that the required return on the stock is 12.3 percent. What is the price per share of the company's stock?

Assume that you are considering purchase of common stock issued by REC Corporation.  Your research has shown that the dividends are paid regularly on a semiannual schedule.  The most recent (past) semiannual dividend paid was D0 = $12 per share.  In the future, dividends are expected to grow at an annual rate of 4%.  You have determined that your required rate of return (discount rate) for this stock would be 6.5% per year.  NOTE:  $12 is the amount that was paid semiannually.  It does not need to be divided by two.   Based on this information, answer the following:   A.  What are the next four upcoming dividends for this common stock (i.e., D1, D2, D3, D4)?   B.  Using the Discounted Cash Flow Method, what is the value of this common stock?   C.  Assume that the current market price of this common stock is $325 per share.  At this price, what is the stock's annual expected return according to the Discounted Cash Flow Method?   D.  Based on your answer to part B, would you invest in…

1. Walton Inc.'s stock just paid a dividend of $1.  The company's dividend is expected to grow at a rate of 0.23 this year, 0.18, next year, and 0.06 for every year after that. If Walton has a required rate of return of 0.12, what is the value of Walton's the stock? 2.

You originally purchased Hershey stock at $161. It paid a dividend of $3.00 in the last year. Currently, the stock is selling for $156 per share. What is your total return if you sell the stock today?

Please answer part A-D and include a short explanation of how you arrived at each answer. A) A share of perpetual preferred stock pays an annual dividend of $9.8 per share. If investors require a 13.9  percent rate of return, what should be the price of this preferred stock? B) The last dividend on Spirex Corporation's common stock was $5.9, and the expected growth rate is 10 percent. If you require a rate of return of 29.5 percent, what is the highest price you should be willing to pay for this stock? C) The last dividend paid by Klein Company was $1.00. Klein's growth rate is expected to be a constant 8  percent for 2 years, after which dividends are expected to grow at a rate of 6 percent forever. Klein's required rate of return on equity (rs) is 12 percent. What is the current price of Klein's common stock? D) A firm expects to pay dividends at the end of each of the next four years of $2.00, $1.50, $2.50, and $3.50. If growth is then expected to level off at 13 percent, and if you…