Franklin Corporation is expected to pay a dividend of $1.24 per share at the end of the year (D1 = $1.24). The stock sells for $32.40 per share, and its required rate of return is 7.2%. The dividend is expected to grow at some constant rate, g, forever. What is the equilibrium expected growth rate?

3. Suppose that Steady State Electronics wins a major contract for its new computer chip. The very profitable contract will enable it to increase the growth rate of dividends from 5% to 6% without reducing the current dividend from the projected value of $4.00 per share. Moreover, we assume that the required rate of return is 12% per year. a. What is the post-announcement stock price? b. What will happen to future expected rates of return on the stock?

Tanrun Inc. is expected to pay an annual dividend of $0.45 per share in one year. Analysts expect the firm's dividends to grow by 4% forever. Its stock price is $35.1 and its beta is 1.5. The risk-free rate is 2% and the market risk premium is 4.5%. A. What is the best guess for the cost of equity? Recall that both Dividend Growth Model and CAPM can be used to find cost of equity. Here assume the best guess is the simple average of the two.

4) Suppose stock AAA pays an annual dividend of $2. Shareholders require a rate of return of 12% annually on the stock. a) Use the DDM model to find the price of the stock. b) Suppose the firm just paid a dividend of $2 but it is expected that the dividend rate will grow at a fixed rate such that next year's dividend will be $2.20. What will the dividend payments be over the next 3 years? c) With the growth rate as described in part b), calculate the price of a single share of the stock. d) Now suppose you hear from an well known analyst that even though the firm just paid a $2 dividend, the firm is expected to have supernormal growth rate of 20% over the next 5 years. After that, growth will level off to 10% per year. Over these 5 years, the firm plans to take on massive amounts of debt. So the discount rate investors should use is 15% over those supernormal growth years. After that the discount rate should revert to 12%. Calculate the price of a share of stock.

3D printing Corp paid a dividend yesterday of $1 per share. The dividend is expected to grow at 29.00% per year for 2 years and then the growth rate will slow to 2.90% per year forever. If the required rate of return is 7.40%, then what is the current stock price? (Pls use formulas) a. $34.11 b.$36.63 c. 27.62 d.$35.63 e. $33.36

Please show me step by step how to work parts c and d.  Thank you.

2.  If a firm’s earnings per share grew from $1 to $2 over a 10-year period, the total growthwould be 100%, but the annual growth rate would be less than 10%.  True or false? Explain. (Hint: Solve for the interest rate. Make sure you put the PV or FV as a negative number.)

GHI's last dividend was P2.00. The dividend growth rate is expected to be constant at 3% for 2 years, after which dividends are to expected to grow at a rate of 8% forever. The company's required rate of return is 12%. What is the company's current stock price?      A. P57.30   B. P51.40   C. P53.80   D. P49.20   E. Answer not given

3. The next dividend payment by Apple Inc. will be $2.70 per share. The dividends are anticipated to maintain a 6% growth rate, forever. If the stock currently sells for $50 per share, what is the required return? (show work)

Suppose you are considering buying the stocks of two companies that are similar in many respects. Both companies are expected to earn $6 per share in the coming year. Company A is expected to pay out the entire amount of earning as dividends one year from now, while company B is expected to pay out only half of the earnings as dividend, i.e. $3 per share. Both require a rate of return of 14%. A's constant growth of rate is 0, while B's is 5%. What are the expected prices of Stocks A and B? Stock A $42.86; Stock B $33.33 Stock A $50.12; Stock B $60.25 Stock A $35.86; Stock B $45.80