GAZ COMPANY PAID DIVIDENDS LAST 4 YEARS AS FOLLOWSDIVIDENDS2.42.522YEAR2000200120022003THIS YEAR THE DIVIDENDS IS 4.5 AND WILL GROW AT A CONSTANT RATE WHAT IS THE PRICE OF THESTOCK IF THE REQUIRED RATE OF RETURN IS 0.36 percentwhat is the growth rate? what is the price

Gordon's constant growth model is a quantitative approach to determine the intrinsic price of the…

Answered: GAZ COMPANY PAID DIVIDENDS LAST 4 YEARS…

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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YZ Inc. is experiencing rapid growth. Earnings and dividends are expected to grow at a rate of 17% during the next 2 years, at 15% the following year, and at a constant rate of 7% during Year 4 and thereafter. Its last dividend was $1.55, and its required rate of return is 12%. a. Calculate the value of the stock today. b. Calculate P1 and P2 (Prices for Year 1 and Year 2). c. Calculate the dividend and capital gains yields for Years 1, 2, and 3.
J Pinkman Motors paid a dividend of $ 3.75 last year. If J Pinkmans return on equity is 24% and its retention rate is 25%, what is the value of the common stock if investors require a 20% rate of return? a. $ 38.39 b. $18.39 c. $82.39 d. $ 28.39
(a) Stock A just distributed a dividend of $4. It is expected that the company will increase its dividend by 18% in the coming year, 15% in the second year and 10% in the third year. After the third year, the company will maintain the dividend growth rate at 8% forever. How much would Stock A be worth today if its yearly required rate of return is 15%?
Suppose firm Z paid a dividend of 1.00 in the year that just ended . Earnings and dividends have grown from several years . The required rate on the stock is 0.12 and the market price is 60 per share . Find the constant growth g?
This year, Hope Corporation paid a dividend of $0.50 per share. The company expect dividends to increase by 4.5% each year forever. If investors require a return of 12%, what is the value of a Hope Corporation share today? a. $6.67 b. $6.97 c. $4.17 d. $7.47 e. $0.50
1. A company just paid dividends of $2.75 per share. The company has a constant growth of 5.5%. The risk free rate is 2.5%, beta is 0.90 and market return of 8%. The stock is selling at $75.50. 1. Determine the rate of return on equity. 2. What is the stock price after a year?
GMC is growing quickly. Dividends are expected to grow at a rate of 6 percent for the next three years, with the growth rate declining to a constant 2 percent thereafter. If the required return is 10 percent for the first two years and then 8 percent thereafter. The company just paid a dividend of $4, what is the current share price? A. $62.00 B. $77.48 C. $73.19 D. $84.52
Allstate Corp (ALL) recently paid a dividend of $5.51. The required rate of return is 6.97%. Other things held constant, what would the stock’s price be if the growth rate was 2.75%? A. $104.57 B. $134.16 C. $149.88 D. $179.85
Answer in excel format and explain formulas used.
DDD company's last dividend was $1.25 dividend growth rate is expected to be a constant at 35% for three years after which dividends are expected to grow at a rate of 6% forever if the firms required return is 11% what is the current stock price?
3. A company paid $1.75 most recent dividend (Do) for the common stock. The growth rate of dividend is expected to be 8% indefinitely. What is its price if the market's rate of return is 16%? A. $20.1 B. $21.8 C. $22.7 D. $23.6
Suppose Barclay Corp is expected to pay a dividend of $2.50 at the end of the year. f the company and its dividends are growing at a relatively constant rate of 3.5% and Investors required return on the stock is 10.2%, what is the value of the stock? O$37.31 O $24.47 O$25.37 O $24.51 O$38.62 Page 13 of 30 Previous Page Next Page 0gf30.guestions.saved.

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GAZ COMPANY PAID DIVIDENDS LAST 4 YEARS AS FOLLOWS DIVIDENDS YEAR 2000 2.4 2.5 2 2 2001 2002 2003 THIS YEAR THE DIVIDENDS IS 4.5 AND WILL GROW AT A CONSTANT RATE WHAT IS THE PRICE OF THE STOCK IF THE REQUIRED RATE OF RETURN IS 0.36 percent what is the growth rate