Design a spreadsheet similar to the one below to compute the value of variable growth rate firm over a five-year horizon. What is the value o the stock if the current dividend is $1.3, the first – stage growth is 16%, the second - stage growth is 8%, and the discount rate is 15 % ? What the value of the stock if the current dividend is $1.3, the first - stage
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- You observe a stock price of $18.75. You expect a dividend growth rate of 5%, and the most recent dividend was $1.50. What is the required return? Solve using ExcelDesign a spreadsheet similar to the one below to compute the value of a variable growth rate firm over a five-year horizon. a. What is the value of the stock if the current dividend is $1.4, the first-stage growth is 14%, the second-stage growth is 7%, and the discount rate is 15%? b. What is the value of the stock if the current dividend is $1.4, the first-stage growth is 1%, the second-stage growth is 13%, and the discount rate is 14.0%? c. What is the value of the stock if the current dividend is $2.8, the first-stage growth is 14%, the second-stage growth is 7%, and the discount rate is 13%? Complete this question by entering your answers in the tabs below. Required A Required B Required C What is the value of the stock if the current dividend is $1.4, the first-stage growth is 1.4%, the second-stage growth is [a (7)%, and the discount rate is 14%? Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Year 4 Year 5 Projected dividend Terminal price…Blue is currently selling for $26 per share. Its next dividend (in one year) is forecasted to be $1. Immediately after the dividend is paid, you expect the price to be $33. a. What is its expected dividend yield? b. What is its expected capital gain rate? c. What is the equity investors' expected return? Question content area bottom Part 1 a. Dividend yield: enter your response here%. (Round to two decimal places.) b. Capital gain rate: enter your response here%. (Round to two decimal places.) c. Expected Return: enter your response here%. (Round to two decimal places.)
- Additional Activities Perform what is being asked in the following: 1. What will you pay today for a stock that is expected to make a P 45.00 dividend in one year if the expected dividend rate is 5% and you require a 12% return on your investment? 2. XYZ Company's preferred stock is selling for P 60.00 a share. If the required return is 8%, what will the dividend be two years from now? 3. Your broker is trying to sell you a stock with a current market price of P 2,160.00 The stock's last dividend was P 53.25, and earnings and dividends are expected to increase at a constant growth rate of 10%. Is the stock fairly valued if the return is 13%? Explain why or why not.You observe a stock price of $17. You expect a dividend growth rate of 5% and the next year's dividend was $1.70. What is the required return?A. 14.5%B. 15%C. 15.5%NoRagrets, Inc is expected to pay a dividend in year 1 of $2 and a dividend in year 2 of $2.40. After year 2, dividends are expected to grow at the rate of 6% per year. An appropriate required return for the stock is 9%. The stock should be worth _______ today. Select one: a. $79.63 b. $73.21 c. $67.32 d. $73.37
- Consider an example. Assume a share of preferred stock with the following characteristics: Par value $100 Dividend rate 3.0% per year Payment schedule semiannual Maturity date You are analyzing this preferred stock for possible purchase. Your required rate of return on this stock is 5% per year, compounded semiannually. Draw a time line showing the expected dividends for this preferred stock. Calculate the value of this preferred stock based on the required rate of return. Assume that the current market price for this preferred stock is $75 per share. Calculate the expected return based on the market price. Should you invest in the stock? Why or why not? Be sure to use your results from BOTH parts B and C above. You are analyzing a share of XYZ…Assume that you are a consultant to Broske Inc., and you have been provided with the following data: the next expected dividend is $0.67; the current market price is $42.50 and the constant growth rate for the dividends is 8.00% Based on the information given what is the cost of equity?Assume that a share of stock has just paid an annual dividend of $3.00 (Do), and that this dividend is expected to grow by $0.07 in each future year (i.e., $3.07 in Year 1, $3.14 in Year 2, $3.21 in Year 3, etc.). Also assume that investors require a 15.0 percent rate of return. Given this information, and using the Banko growth model, determine what the current price of this stock should be. Answer in XX.XX format, with no dollar sign. For example, if your answer is $18.29, enter "18.29".
- Suppose Lilly V, Inc. has just paid a dividend. The next dividend, to be paid in a year, is forecasted to be $4. If the growth rate of dividends is 7% and the discount rate is 11%, at what price will the stock sell? a.Less than $100 b.More than $100 c.$100 d.$111Fey Fashions expects the following dividend pattern over the next seven years: The company will then have The a. 15%? b. 20%? a. What is the stock's price today if an investor wants to earn 15%? (Round to the nearest cent.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Year 1 Year 2 Year 3 Year 4 Year 5 $1.20 $1.34 $1.50 $1.68 $1.88 Print company will then have a constant dividend of $2.70 forever. What is the stock's price today if an investor wants to earn Done *** Year 6 $2.11 Year 7 $2.36 - X2. Calculate the value of a stock with an expected annual dividend of $2.00 next year and an estimated annual dividend growth of 2% per year indefinitely. Assume a discount rate of 8%. Solve the problem two different ways: first by using the algebraic formula for the Gordon Growth Model, then by using Excel to calculate and sum the dividends and their respective present values for the next 150 years. hint: Use the PV ConstGrowth Dividend example in the posted DDM Excel Examples file as a guide. Feel free to copy the worksheet and make the minor necessary changes to answer this question.
