Company Z’s earnings and dividends per share are expected to grow indefinitely by 5% a year. If next year’s dividend is $10 and the cost of equity is 8%, what is the current stock price? Please explain with theory too
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Company Z’s earnings and dividends per share are expected to grow indefinitely by 5% a year. If next year’s dividend is $10 and the
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- You expect a company to pay a dividend of 2.50 next year and 3.50 a share for the following 2 years. At that point, you expect that the dividend will increase by 4% every year. If your required return is 8%, what would you pay for the stock today? USE EXCELA company will pay a dividend of $3.28 per share next year. The dividends are expected to grow at 3.75 percent per year indefinitely. You require a return of 10 percent on your investment. How much will you pay for the company’s stock today? What is the stock’s dividend yield (Hint: dividend yield is a stock’s dividend divided by its price)? What will the price be in a year? What is the implied return given the change in price over the one-year period from today? Please use a HP 10bii+ Financial CalculatorProvide detailed steps to solve the following question: Suppose a firm is expected to increase dividends by 20% in one year and by 15% in two years. After that, dividends will increase at a rate of 5% per year indefinitely. If the last dividend was $1 and the required return is 20%, What is the price of the stock?
- Whizcom Inc. is expected to pay a dividend of $1 next period. Dividends are expected to grow at 2% per year and the investors require a return of 12%. i) Compute the current stock price for Whizcom Inc.ii) What would be the likely stock price in year 5?iii) What would be per annum rate of return implied by a change in prices from time 0 to time 5?Suppose a company is expected to pay a dividend of $3.97 next year. The dividend is expected to grow at 6.21% each year. If the stock is currently selling for $260.26, what is the required rate of return on the stock?You are evaluating the stock of XYZ Corp. Suppose that the required rate of return for the firm is 20%. Suppose future dividends are expected to grow at 10% per year. The current stock price of the firm is $55. What is the expected dividend per share next year (D1)? a. $4.5 b. $4.0 c. $5.0 d. $5.5
- Whizcom Inc. is expected to pay a dividend of $1 next period. Dividends are expected to grow at 2% per year and the investors require a return of 12%. a) What would be the likely stock price in year 5? b) What would be per annum rate of return implied by a change in prices from time 0 to time 5?If the last dividend paid by Chemical Brothers Inc. was $1.25 and analysts expect these payments to increase 4% per year, what will the stock price be next year if the required return is 15%? Select one: O a. $12.29 O b. $11.82 O c. $31.25 O d. $12.78 O e. $23.11Show Detailed Steps When Solving The Following Question: Gordon Growth Company is expected to pay a dividend of $4 next period, and dividends are expected to grow at 6% per year. The required return is 16%. What is the current price? What is the price expected to be in year 4?
- Suppose we observe a stock selling at $40 per share. The next dividend will be $1 per share, and you think the dividend will grow at 12 percent per year forever. What is the dividend yield in this case? The capital gains yield?The FI Corporation's dividends per share are expected to grow indefinitely by 6% per year. a. If this year's year-end dividend is $8.00 and the market capitalization rate is 10% per year, what must the current stock price be according to the DDM? Current stock price b. If the expected earnings per share are $16.00, what is the implied value of the ROE on future investment opportunities? (Round your answer to 2 decimal places.) Value of ROE c. How much is the market paying per share for growth opportunities (i.e., for an ROE on future investments that exceeds the market capitalization rate)? (Round your answer to 2 decimal places.) Amount % per shareSuppose a firm is expected to increase dividends by 20% in one year and by 15% in two years. After that dividends will increase at a rate of 5% per year indefinitely. If the last dividend was GH₵ 1 and the required return is 20%, what is the price of the stock?