e dividend-growth model may be used to value a stock: und your answers to the nearest cent. a. What is the value of a stock if: Do = $2.30 k = 8% 9 = 5% V = Do (1 + g) k-9 $ b. What is the value of this stock if the dividend is increased to $4.30 and the other variables remain constant? $ c. What is the value of this stock if the required return declines to 6 percent and the other variables remain constant? $ d. What is the value of this stock if the growth rate declines to 3 percent and the other variables remain constant? $

e dividend-growth model may be used to value a stock: und your answers to the nearest cent. a. What is the value of a stock if: Do = $2.30 k = 8% 9 = 5% V = Do (1 + g) k-9 $ b. What is the value of this stock if the dividend is increased to $4.30 and the other variables remain constant? $ c. What is the value of this stock if the required return declines to 6 percent and the other variables remain constant? $ d. What is the value of this stock if the growth rate declines to 3 percent and the other variables remain constant? $

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 dividend-growth model may be used to value a stock: Do(1+9) V = k - g Round your answers to the nearest cent. a. What is the value of a stock if: Do = $3.10 k = 12% 9 = 8% b. What is the value of this stock if the dividend is increased to $4.30 and the other variables remain constant? $ c. What is the value of this stock if the required return declines to 9 percent and the other variables remain constant? d. What is the value of this stock if the growth rate declines to 5 percent and the other variables remain constant? e. What is the value of this stock if the dividend is increased to $3.70, the growth rate declines to 5 percent, and the required return remains 12 percent? $
The dividend-growth model may be used to value a stock: Round your answers to the nearest cent. V=D0(1+g) / k-g What is the value of a stock if:D0 = $2.50k = 10%g = 6% $ What is the value of this stock if the dividend is increased to $4.40 and the other variables remain constant? $ What is the value of this stock if the required return declines to 7.5 percent and the other variables remain constant? $ What is the value of this stock if the growth rate declines to 4 percent and the other variables remain constant? $ What is the value of this stock if the dividend is increased to $3.20, the growth rate declines to 4 percent, and the required return remains 10 percent? $
The dividend-growth model may be used to value a stock: Round your answers to the nearest cent. What is the value of a stock if:D0 = $5.00k = 12%g = 6% $ What is the value of this stock if the dividend is increased to $6.50 and the other variables remain constant? $ What is the value of this stock if the required return declines to 11 percent and the other variables remain constant? $ What is the value of this stock if the growth rate declines to 3 percent and the other variables remain constant? $ What is the value of this stock if the dividend is increased to $6.50, the growth rate declines to 3 percent, and the required return remains 12 percent? $
The dividend-Growth model may be used to value a stock: V= D0 (1+g) / k-g What is the value of a stock if : D0 = $2 k = 10% g = 6% What is the value of this stock if the dividend is increased to $3and the other variables remain constant? What is the value of this stock if the required return declines to 7.5 percent and the other variable remains constant? What is the value of this stock if the growth rate declines to 4 percent and the other variables remain constant? What is the value of this stock if the dividend is increased to $2.30, the growth rate declines to 4 percent, and the required return remains 10 percent?
. Assume an investor uses the constant-growth DVM to value a stock. Listed are various situations that could affect the computed value of a stock. Look at each one of these individually and indicate whether it would cause the computed value of a stock to go up, go down, or stay the same. Briefly explain your answers. Dividend payout ratio goes up. Stock’s beta rises. Market return increases. Assume throughout that the current dividend (D0) remains the same and that all other variables in the model are unchanged.
the dividend growth model may be use to value a stock v=Do(1+g) k-g a. what is the value of a stock if: Do=$2 k==10% g=6% b. what is the value of this stock if the dividend is increased to $3 and the other variables remain constant? c. what is the value os this stock if the required return decline to 7.5 percent and the other variables remain constant? d. what is the value of this stock if the growth rate declines to 4 percent and the other variables remin constant? e. what is the value of this stock if the dividend is increased to $2.30, the growth rate declines to 4 percent, and the required return remains 10 percent?
. Assume an investor uses the constant-growth DVM to value a stock. Listed are various situations that could affect the computed value of a stock. Look at each one of these individually and indicate whether it would cause the computed value of a stock to go up, go down, or stay the same. Briefly explain your answers. Dividend payout ratio goes up. Stock’s beta rises. Market return increases.
Given the following data, what is the stock's expected growth rate according to the Gordon model? Dividend per share just paid: $3 Current market price: $35 Required rate of return: .10 Assume the stock is priced in equilibrium. Select one: O a. 2.45% O b. 4.32% O c. 3.56% Od. 1.32% c = X FILE
1. (a) What are the two components of most stocks’ expected total return?(b) How does one calculate the capital gains yield and the dividend yield of a stock?(c) If D1 = RM3.00, P0 = RM50, and the expected P at t=1 is equal to RM52, what are the stock’s expected dividend yield, capital gains yield, and total return for the coming year?2. (a) Are stock prices affected more by long-term or short-term performance? Explain.(b) A stock is expected to pay a dividend of RM2 at the end of the year. The required rate of return is rs = 12%. What would the stock’s price be if the growth rate were 4%?What would the stock’s price be if the growth rate were 0%?3. If D0 = RM4.00, rs = 9%, and g = 5% for a constant growth stock, what are the stock’s expected dividend yield and capital gains yield for the coming year?4. (a) Explain what is meant by the terms “horizon (terminal) date” and “horizon (terminal) value”.(b)Suppose D0 = RM5.00 and rs = 10%. The expected growth rate from Year 0 to Year 1 (g0…
Assuming yourself to be Anna, narrate what you would have read in the file. Your narrative should include answers to the following: Note: 1 Retention ratio = 1 – Dividend payout ratio a) If after changing the dividend policy to a 70% payout, Chatterbox grows at a 3% rate, what would be the implied ACTUAL return on equity and stock price? Does the stock price rise or fall? Why?
Round your answers to the nearest cent. What is the value of a stock if:D0 = $2.10k = 10%g = 7% $ What is the value of this stock if the dividend is increased to $3.80 and the other variables remain constant? $ What is the value of this stock if the required return declines to 8 percent and the other variables remain constant? $ What is the value of this stock if the growth rate declines to 5 percent and the other variables remain constant? $ What is the value of this stock if the dividend is increased to $3.10, the growth rate declines to 5 percent, and the required return remains 10 percent? $
The following expression can be used to find the value of a constant growth stock. P0 = D0 / Ks + g

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