CX Enterprises has the following expected dividends: $1.11 in one year, $1.19 in two years, and $1.28 in three years. After that, its dividends are expected to grow at 3.9% per year forever (so thatyear four's dividend will be 3.9% more than $1.28 and so on). If CX's equity cost of capital is 12.3%, what is the current price of its stock?The price of the stock will be $. (Round to the nearest cent.)

Here we will use the dividend discount model. As per the dividend discount model the price of stock…

CX Enterprises has the following expected dividends: $1.11 in one year, $1.19 in two years, and $1.28 in three years. After that, its dividends are expected to grow at 3.9% per year forever (so th year four's dividend will be 3.9% more than $1.28 and so on). If CX's equity cost of capital is 12.3%, what is the current price of its stock?

CX Enterprises has the following expected dividends: $1.11 in one year, $1.19 in two years, and $1.28 in three years. After that, its dividends are expected to grow at 3.9% per year forever (so th year four's dividend will be 3.9% more than $1.28 and so on). If CX's equity cost of capital is 12.3%, what is the current price of its stock?

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter7: Corporate Valuation And Stock Valuation

Section: Chapter Questions

Problem 1P: Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1...

See similar textbooks

Similar questions

CX Enterprises has the following expected dividends: $1.03 in one year, $1.17 in two years, and $1.32 in three years. After that, its dividends are expected to grow at 4.2% per year forever (so that year 4's dividend will be 4.2% more than $1.32 and so on). If CX's equity cost of capital is 12%, what is the current price of its stock? The price of the stock will be $ (Round to the nearest cent.)
CX Enterprises has the following expected dividends: $1.15 in one year, $1.23 in two years, and $1.29 in three years. After that, its dividends are expected to grow at 3.9% per year forever (so that year 4's dividend will be 3.9% more than $1.29 and so on). If CX's equity cost of capital is 11.7%, what is the current price of its stock? (Round to the nearest cent.)
CX Enterprises has the following expected dividends: $1.15 in one year, $1.25 in two years, and $1.34 in three years. After that, its dividends are expected to grow at 3.9% per year forever (so that year four's dividend will be 3.9% more than $1.34 and so on). If CX's equity cost of capital is 11.5%, what is the current price of its stock? The price of the stock will be $ (Round to the nearest cent.)
CX Enterprises has the following expected dividends: $1.03 in one year, $1.18 in two years, and $1.25 in three years. After that, its dividends are expected to grow at 4.4% per year forever (so that year 4's dividend will be 4.4% more than $1.25 and so on). If CX's equity cost of capital is 11.6%, what is the current price of its stock? The price of the stock will be $. (Round to the nearest cent.) C
CX Enterprises has the following expected dividends: $1.12 in one year, $1.24 in two years, and $1.35 in three years. After that, its dividends are expected to grow at 4% per year forever (so that year 4's dividend will be 4% more than $1.35 and so on). If CX's equity cost of capital is 12.2%, what is the current price of its stock?
CX Enterprises has the following expected dividends: $1.00 in one year, $1.15 in two years, and $1.25 in three years. After that, its dividends are expected to grow at 4% per year forever (so that year 4's dividend will be 4% more than 1.25 and so on). If CX's equity cost of capital is 12%, what is the current price of its stock? The price of the stock will be $__________________ (Round to the nearest cent.)
Gremlin Industries will pay a dividend of $1.65 per share this year. It is expected that this dividend will grow by 5% per year each year in the future. The current price of Gremlin's stock is $22.20 per share. What is Gremlin's equity cost of capital?
Summit Systems will pay a dividend of $1.50 this year. If you expect Summit’s dividend to grow by 6% per year, what is its price per share if its equity cost of capital is 11%?
HighGrowth Company has a stock price of $20. The firm will pay a dividend next year of $1, and its dividend is expected to grow at a rate of 4% per year thereafter. What is your estimate of HighGrowth’s cost of equity capital?
Enterprises has the following expected dividends: $1.13 in one year $1.19 in two years, and $1.34 in three years. After that, dividends are expected to grow at 3.8% per year forever (so that year 4's dividend will be 3.8% more than $1.34 and so on). If CX's equity cost of capital is 12%, what is the current price of its stock?
Summit Systems will pay a dividend of $1.49 one year from now. If you expect Summit's dividend to grow by 6.9% per year, what is its price per share if its equity cost of capital is 11.8% ?
Anle Corporation has a current price of $20, is expected to pay a dividend of $1 in one year, and its expected price right after paying that dividend is $22. What is Anle’s expected dividend yield? What is Anle’s expected capital gain rate? What is Anle’s equity cost of capital?