HQZ Inc., has just paid a dividend of $3.38 per share and has announced that it will increase the dividend by $2.79 per share for each of the next four years, and then never pay another dividend. If you require a return of 10.41 percent on the company's stock, how much will you pay for a share today? Answer to two decimals.

HQZ Inc., has just paid a dividend of $3.38 per share and has announced that it will increase the dividend by $2.79 per share for each of the next four years, and then never pay another dividend. If you require a return of 10.41 percent on the company's stock, how much will you pay for a share today? Answer to two decimals.

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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Similar questions

Simtek currently pays a $3.5 dividend (D0) per share. Next year’s dividend is expected to be $4 per share. After next year, dividends are expected to increase at a 8 percent annual rate for 3 years and a 3 percent annual rate thereafter. Use Table II to answer the questions. Do not round intermediate calculations. Round your answers to the nearest cent. What is the current value of a share of Simtek stock to an investor who requires a 16 percent return on his or her investment?$ If the dividend in year 1 is expected to be $4 and the growth rate over the following 3 years is expected to be only 5 percent and then 3 percent thereafter, what will the new stock price be?$
TSC, Inc. sells for $23 and pays an annual per share dividend of $1.20, which you expect to grow at 8 percent. What is your expected return on this stock? Round your answer to the two decimal places. % What would be the expected return if the price were $36 a share? Round your answer to the two decimal places. %
JJ Industries will pay a regular dividend of $0.65 per share for each of the next four years. At the end of four years, the company will also pay out a liquidating dividend. If the discount rate is 8 percent, and the current share price is $71, what must the liquidating dividend be? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Dee's made two announcements concerning its common stock today. First, the company announced that the next annual dividend will be $1.87 a share. Secondly, all dividends after that will decrease by 1.91 percent annually. What is the value of this stock at a discount rate of 10.0 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Smiling Elephant, Inc., has an issue of preferred stock outstanding that pays a $4.70 dividend every year, in perpetuity. If this issue currently sells for $79.95 per share, what is the required return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
An investor sells a stock short for $97 a share. The company pays a $4.70 annual cash dividend. After a year has passed, the seller covers the short position at $85. If the margin requirement is 57 percent, what is the percentage return earned on the investment?Redo the calculations, assuming the price of the stock is $103 when the investor closes the position.Based on your calculations to both scenarios, what generalization can be inferred?
Nofal Corporation will pay a $4.10 per share dividend next year. The company pledges to increase its dividend by 6 percent per year, indefinitely. Required: If you require a return of 10 percent on your investment, how much will you pay for the company’s stock today? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
XYZ Inc., has an odd dividend policy. The company has just paid a dividend of $11.00 per share and has announced that it will increase the dividend by $9.00 per share for each of the next four years, and then never pay another dividend. If you require a return of 16 percent on the company’s stock, how much will you pay for a share today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
If you require a return of 12 percent on this stock, what will you pay for a share today?
Premier, Incorporated, has an odd dividend policy. The company has just paid a dividend of $7 per share and has announced that it will increase the dividend by $6 per share for each of the next five years, and then never pay another dividend. If you require a return of 14 percent on the company's stock, how much will you pay for a share today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current share price
JJ Industries will pay a regular dividend of $3.10 per share for each of the next four years. At the end of four years, the company will also pay out a liquidating dividend. If the discount rate is 11 percent, and the current share price is $67, what must the liquidating dividend be? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Goulds Corp. pays a constant $9.05 dividend on its stock. The company will maintain this dividend for the next 9 years and will then cease paying dividends forever. If the required return on this stock is 10%, what is the current share price? (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Current share price LA

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