Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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If the next year's dividend is $1, and all the future dividends are expected to grow at $0.05 annually, what is the expected value of the stock if the required is 10%?
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- What would be the price of a stock that pays an annual fixed dividend of $1.2 for ten years, and then the dividend payment increases by 1% every year, and the required rate of return is 5% annually?arrow_forwardYour company will pay a dividend of $4.00 next year and then have it grow annually at 16.00% for the following 3 years before growing at 2% indefinitely thereafter. The equity has a required return of 9.50%. What is the price of the stock today? Options $71.28 $73.15 $75.03 $76.90 $78.78arrow_forwardstock X just paid a dividend of $1 and is expected to pay a $3 dividend per year for the foreseeable future. Given that the required rate of return on stock X is 5%, what would be the fair price of stock X 3 year from today? 1. $3.86 2. 4 3. 3.47 4. 4.86 5. 60arrow_forward
- Three Corners Markets is expected to pay an annual dividend of $1.37 per share next year. After that, the future dividends will be increasing by 2.8 percent annually. If you require a return of 11.6 percent, how much are you willing to pay to purchase one share of this stock today? O $16.00 O $18.23 O $17.56 $15.57arrow_forwardIf the current year's dividend was $2 per share and all future dividends will decrease by 5% annually. What is the stock worth today at a required return of 15%?A. 9.5 B. 10C. 20arrow_forwardRequired Returns Suppose we observe a stock selling for $40 per share. The next dividend will be $1 per share, and you think the dividend will grow at 12 percent per of the stock? What will the stock be worth in five Problem 1.) 7.2. year forever. What is the dividend yield in this case? The capital gains yield? The total required return? (See Problem 3.)arrow_forward
- 10. I need help with finance home work question asap please A stock that currently sells for $120 has EPS of $20.75. What is the annual rate of return on this stock if the company is expected to pay a dividend per share in the amount of $18 each year forever?arrow_forwardWhat would be the price of a stock that pays an annual fixed dividend of $1 for ten years, and then the dividend payment increases by 1% every year, and the required rate of return is 5% annually?arrow_forwardHow much would you be prepared to pay for a share in 2 years’ time that pays a $1.5 dividend each year constantly ? Assume the required rate of return is expected to remain constant at 9.1% per year.arrow_forward
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