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

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.)
You own 1,000 shares of stock in Avondale Corporation. You will receive a $3.45 per share dividend in one year. In two years, the company will pay a liquidating dividend of $62 per share. The required return on the company's stock is 15 percent. a. Ignoring taxes, what is the current share price of your stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. If you would rather have equal dividends in each of the next two years, how many shares would you sell in one year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What would your cash flow be for each year for the next two years? Hint: Dividends will be in the form of an annuity. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Answer is not complete. a. Share price b. Number of shares c. Cash flow 1,950.00 $ 64,242.50 X
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?
XYZ Corp will pay a dividend of $4.80 per share next year. The company pledges to increase its dividend by 7.75 percent per year, indefinitely. If you require a return of 11 percent on your investment, how much will you pay for the company’s stock today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
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
You buy Disney stock at $80/ share. It’s worth $85 at the end of the first year and $90 at the end of the second year. You decide to sell it at $90. No dividend is paid, what are the two one-year returns (expressed as a percent)? What is the annualized return or geometric average (it’s a percent) for the two years?
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
PQR, Inc., has an issue of preferred stock outstanding that pays a $4.69 dividend every year, in perpetuity. If this issue currently sells for $38.98 per share, what is the required return in percent? Answer to two decimals.

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