DVD's Forever has seen its business decline. It recently paid a dividend of $1.80, but this dividend is expected to decrease by 6% forever. If the required rate of return is 8.57%, what is the value of one share of common stock? (Do not round intermediate answers, but round the final answer to two decimal places) O $48.34 O $10.92 O $51.42 O $11.61

DVD's Forever has seen its business decline. It recently paid a dividend of $1.80, but this dividend is expected to decrease by 6% forever. If the required rate of return is 8.57%, what is the value of one share of common stock? (Do not round intermediate answers, but round the final answer to two decimal places) O $48.34 O $10.92 O $51.42 O $11.61

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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The Evanec Company's next expected dividend, D1, is $3.08; its growth rate is 4%; and its common stock now sells for $39.00. New stock (external equity) can be sold to net $31.20 per share. a. What is Evanec's cost of retained earnings, rs? Do not round intermediate calculations. Round your answer to two decimal places. rs b. What is Evanec's percentage flotation cost, F? Round your answer to two decimal places. F = % c. What is Evanec's cost of new common stock, re? Do not round intermediate calculations. Round your answer to two decimal places. re = %
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The Evanec Company's next expected dividend, D1, is $3.50; its growth rate is 5%; and its common stock now sells for $38.00. New stock (external equity) can be sold to net $34.20 per share. A) What is Evanec's cost of retained earnings, rs? Do not round intermediate calculations. Round your answer to two decimal places.rs = % B) What is Evanec's percentage flotation cost, F? Round your answer to two decimal places.F = % C) What is Evanec's cost of new common stock, re? Do not round intermediate calculations. Round your answer to two decimal places. re = %
Whistle Stop Trains pays a constant $16 dividend on its stock. The company will maintain this dividend for the next 14 years and will then cease paying dividends forever. What is the current price per share if the required return on this stock is 15 percent? Question 16Answer a. $82.48 b. Not enough information to formulate a response c. $91.59 d. $77.78
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