I have underline answer but I need explanation for that   General Importers announced that it will pay a dividend of $3.80 per share one year from today. After that, the company expects a slowdown in its business and will not pay a dividend for the next 4 years. Then, 6 years from today, the company will begin paying an annual dividend of $1.90 forever. The required return is 11.7 percent. What is the price of the stock today? a.16.24 b.11.24 c.13.83 d.12.74

Q: Sunland, Inc., management expects to pay no dividends for the next six years. It has projected a…

A: This question is from stock valuation model. The model used here to calculate the value of the firm…

Q: The RLX Company just paid a dividend of $3.20 per share on its stock. The dividends are expected to…

A: Dividend discounted models (DDM)  is a financial approach that helps in determining the current…

Q: Metallica Bearings, Incorporated, is a young start-up company. No dividends will be paid on the…

A: Share price Share price is the current market price of the share. It is the price of the share at…

Q: Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over…

A: Required rate of return is 14% Dividend paid in year -8 is $15.50 Dividend growth rate is 6% To…

Q: Bon Chance, Inc., has an odd dividend policy. The company has just paid a dividend of $6.75 per…

A: GIVEN, RATE = 13% D0= $6.75 company announce it will increase dividend by $10.50 each year till next…

Q: With the Covid-19 crisis, the Starlight Company announced that it would stop paying dividends for…

A: As per Dividend Discount model, P4 = D4*(1+g) /(ke-g) Where D4 = $2 g = growth rate i.e. 1% ke =…

Q: Marigold Inc.'s common stock currently sells for $40 per share, but the firm will net only $34 per…

A: Cost of equity = [ Dividend *(1+growth) / Net price ] +   growth

Q: Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over…

A: Solution- Calculate the stock price for 9th year or P9- P9=Next dividend(D10)/Required rate(r)-Grwth…

Q: General Importers announced that it will pay a dividend of $2.00 per share one year from today.…

A: The current price of a stock is calculated by discounting all the future dividends at the present…

Q: The VSE Corporation currently pays no dividend because of depressed earnings. A recent change in…

A: Stock Price is discounted value of all future benefits that an investors will receive by holding it.…

Q: Simpkins Corporation does not pay any dividends because it is expandingrapidly and needs to retain…

A: Given: D3 = $0.50 Growth rate for Year 4 and Year 5 is 80%. Followed by a constant growth rate (g)…

Q: Metallica Bearings, Incorporated, is a young start-up company. No dividends will be paid on the…

A: Formula used:   Value after year 10 year=Dividend10×(1+Growth rate)  (Required return-Growth…

Q: Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over…

A: Market value is another term for current pricing. It is the most recent price at which a share of…

Q: An analyst for JPGR Bank & Trust is considering the value of ZBX stock.  ZBX isn't currently paying…

A: First Quarterly Dividend of $1.40 per share First Dividend paid in 1.25 years Required rate is 16%…

Q: Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over…

A: Dividend in year 14 (D14) = $ 14 Growth rate after 14 years (g) = 4% Required return (r) = 9% Period…

Q: MDK, Inc. is a high growth firm that has never paid a dividend. The company just issued a press…

A: A model that helps to evaluate the value of the stock with the assumption that the dividend will…

Q: Eakins Inc.’s common stock currently sells for $22.50 per share, the company expects to earn $2.75…

A: Given:  Po = $22.5 EPS = $2.75 Payout ratio = 70% G= 6% F= 8%

Q: Bon Chance, Inc., has an odd dividend policy. The company has just paid a dividend of $5.85 per…

A: Current dividend = $5.85 Future dividends Year Last dividend Dividend for  the period   A…

Q: compute the current price of the stock.

A: The current price of a stock is the discounted value of the earnings or dividend expected.  Also,…

Q: The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.80 per share on its stock. The…

A: Cost of capital is the cut-off rate that is required by the investors to earn on the investment in…

Q: Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over…

A: The question is related to Dividend Policy. The Current Share price will be calculated with the help…

Q: Stock analysts believe that Bryson Corporation will not be able to pay a dividend until three years…

A: Stocks are issued by companies as a measure of raising funds through the general public and…

Q: SG Ltd. has historically paid a dividend of $2.50 to its shareholders semi-annually. The company has…

A:

Q: Maurer, Inc., has an odd dividend policy. The company has just paid a dividend of $6 per share and…

A: Calculation of Price of Share today:The price of share today is $65.75.Excel Spreadsheet:

Q: The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.20 per share on its stock. The…

A: Stock Price is computed by adding discounted value of future benefits that investor will receive by…

Q: Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over…

A: Companies that are at their introduction or growth stage follow a full retention policy to invest in…

Q: Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over…

A: Dividend after 10 years (D10) = $11 Growth rate (g) = 4% Required return (r) = 12% Period without…

Q: Forral Company has never paid a dividend. But the company plans to start paying dividends in two…

A: Dividend after 2 years = $ 2 Growth rate after 2  years = 5% Dividend in year 3 = 2*(1+0.05)…

Q: Bread, Inc., has an odd dividend policy. The company has just paid a dividend of $6 per share and…

A: Given Data: Dividend Just Paid = $6 Dividend Growing each year =$ 4 Required return = 11%

Q: The Impulse Shopper recently paid an annual dividend of $1.13 per share. The company just announced…

A: In this, we have to calculate dividends and from that, we have to calculate the present value of the…

Q: Simpkins Corporation does not pay any dividends because it is expanding rapidly and needs to retain…

A: The stock value for current date is ascertained using the DDM (dividend-discount model) where each…

Q: Metallica Bearings, Incorporated, is a young start-up company. No dividends will be paid on the…

A: Answer -   Step 1 - Calculation of Stock Price at year 9 - P9 = D10 / ( Required Return - Growth…

Q: Metallica Bearings, Incorporated, is a young start-up company. No dividends will be paid on the…

A: Hi there, Thanks for posting the question. As Per Q&A guidelines, the solution for the first…

Q: The future earnings, dividends, and common stock price of Callahan Technologies Inc. are expected to…

A: Under DCF approach Cost of equity = Ke = D1P0+ g Where, D1 = Dividend of the next year =$2.52 P0 =…

Q: The Foreman Company’s earnings and common stock dividends have been growing at an annual rate of 5…

A: Answer -  a. 10 percent Po = D1/(ke - g) g = 0.05 Do = $5 ke = 0.10 Dl = Do(1 + g) = 5(1 + .05) =…

Q: Yam-Hash Corporation is expanding rapidly, and it does not pay any dividends because it currently…

A: P0 = D0(1+g) or D1/(Ke-g)

Q: price of such a stock today

A: Stock price refers to the current price of the share of stock that is trading in the market. It is…

Q: The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.20 per share on its stock. The…

A: A dividend is a payment made by a corporation to its shareholders, either in cash or in kind.

Q: The Cricket Co. just paid a dividend of $1.55 per share on its stock. The dividends are expected to…

A: Value of the stock refers to the price at which the stock trades in the market. The stock price is…

Q: BUMMER MAN, INC stock paid a current dividend of $8 per share and this dividend is expected to grow…

A: Dividend in Year 0 = 8 Dividends in years ahead: Year Dividends Working 1 10.24 8*(1.28) 2…

Q: The VSE Corporation currently pays no dividend because of depressed earnings. A recent change in…

A: It is assumed that the dividend will grow at 12% forever after 4 years Given D1 = $0.5D2 = $1.25 D3…

Dividend Valuation

Dividend refers to a reward or cash that a company gives to its shareholders out of the profits. Dividends can be issued in various forms such as cash payment, stocks, or in any other form as per the company norms. It is usually a part of the profit that the company shares with its shareholders.

Dividend Discount Model

Dividend payments are generally paid to investors or shareholders of a company when the company earns profit for the year, thus representing growth. The dividend discount model is an important method used to forecast the price of a company’s stock. It is based on the computation methodology that the present value of all its future dividends is equivalent to the value of the company.  

Capital Gains Yield

It may be referred to as the earnings generated on an investment over a particular period of time. It is generally expressed as a percentage and includes some dividends or interest earned by holding a particular security. Cases, where it is higher normally, indicate the higher income and lower risk. It is mostly computed on an annual basis and is different from the total return on investment. In case it becomes too high, indicates that either the stock prices are going down or the company is paying higher dividends.

Stock Valuation

In simple words, stock valuation is a tool to calculate the current price, or value, of a company. It is used to not only calculate the value of the company but help an investor decide if they want to buy, sell or hold a company's stocks.