JRN Enterprises just announced that it plans to cut its next-year dividend, D₁, from $2.50 to $1.10 per share and use the extra funds to expand its operations. Prior to this announcement, JRN's dividends were expected to grow at 3% per year and JRN's stock was trading at $25.00 per share. With the new expansion, JRN's dividends are expected to grow at 6% per year indefinitely. Assuming
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- JRN Enterprises just announced that it plans to cut its next-year dividend,D1, from $2.25 to $1.20 per share and use the extra funds to expand its operations. Prior to this announcement, JRN's dividends were expected to grow at 4% per year and JRN's stock was trading at $24.50 per share. With the new expansion, JRN's dividends are expected to grow at 8% per year indefinitely. Assuming that JRN's risk is unchanged by the expansion, the value of a share of JRN after the announcement is closest to?Cooperton Mining just announced it will cut its dividend from $3.88 to $2.59 per share and use the extra funds to expand. Prior to the announcement, Cooperton's dividends wereCX Enterprises has the following expected dividends: $1.03in one year, $1.18 in two years, and $1.25 in three years. After that, its dividends are expected to grow at 4.4% per yearZoom Enterprises expects that one year from now it will pay a total dividend of $5.0 million and repurchase $5.0 millionworth of shares. It plans to spend $10.0 million on dividendsZoom Enterprises expects that one year from now it will pay a total dividend of S5.0 million and repurchase $5.0 million worth of shares. It plans to spend $10.0 million ondividends and repurchases every year after that forever, although it may not always be an even split between dividends and repurchases. If Zoom's equity cost of capital is 13.0% and it has 5.0 million shares outstanding, what is its shareprice today? The price per share is S. (Round to the…Canadian Tire just announced that it plans to reduce its dividend from $2.50 to $1.50 per share and use the extra funds to expand its operations. Prior to this announcement, Canadian Tire.s dividends were expected to grow at 4% per year and Canadian Tire.s stock was trading at $25.00 per share. With the new expansion, Canadian Tire.s dividends are expected to grow at 8% per year inde.nitely. Assuming that Canadian Tire.s risk is unchanged by the expansion, the value of a share of Canadian Tire after the announcement is approximately: A) $25.00 B) $15.00 C) $31.25 D) $27.50 E) $29.75
- Oswego Plumbing Works (ticker: OPW) just announced that it will cut next year's dividend, D₁, from $3.00 to $1.50 per share and the firm will use the extra funds to expand operations. Prior to this announcement, OPW's dividends were expected to grow at 6% per year and OPW's common stock was trading at a price of $26.00 /share. With the new expansion, OPW's dividends are expected to grow at 12% per year indefinitely Assuming the overall risk of the firm is unchanged by this expansion, the value of one share of OPW after the announcement is closest to: OA. $26.00 OB. $27.09 OC. $54.17 OD. $13.00The earnings, dividends, and stock price of Stan Company are expected to grow at 7 percent per year after this year. Stan Company's common stock sells for P23 per share, its last dividend was P2.00 and the company pay P2.14 at the end of the current year. Stan Company should pay P2.50 flotation cost. Using the dividend growth model, what is the expected cost of retained earnings for Stan Company? Round off your final answer up to two decimal places.Stewart Industries expects to pay a $3.00 per share dividend on its common stock at the end of the year (i.e. D1 = $3.00). The dividend is expected to grow 25 percent a year until t = 3, after which time the dividend is expected to grow at a constant rate of 5 percent a year (i.e. D3 = $4.6875 and D4 = $4.9219). The stock’s beta is 1.2, the risk-free rate of interest is 6 percent, and the market risk premium (i.e., rm –rrf) is 5 percent. What is the company’s current stock price?
- Pimento Inc. estimates that this year’s earnings will be $75 million. There are 12 million shares outstanding at a price of $27.50 per share. Pimento had been following a 100% dividend payout policy until now but would now like to shift to the Residual Dividend policy for this year. Dividends from this year’s earnings are paid next year. a) What is the EPS and DPS for Pimento under the 100% dividend payout policy? b) If the planned capital outlay is for $72 million and the target capital structure is 1.5:1, willPimento be able to pay dividends as per the Residual Dividend Policy? If so, what will be the dividend per share? Investors require a 22.72% rate of return. Ignore taxes. c) IfPimento shifts from a 100% payout policy to the residual dividend policy, what impact will this have on its stock price, assuming the firm earns 22.72% as its ROE? Support your argument through relevant computations. Which argument of the dividend policy decision would you have demonstrated…JFINEX Corporation is applying a stable dividend payout policy. This year, it paid out a total of 10M in dividends. Next year, it s revenues and income are expected to increase. Dividend payments are expected to? " Remain at 10M Decrease below 10M Increase above 10M Remain at 10M or higher None of the aboveZozan Corp has just paid a dividend of $2 per share. The company's dividends are expected to grow at 5% next year, 10% in the following year, 15% in the third year, and 20% in the fourth year (Dividend growths are based on the previous year's dividend payment). Finally, with the fifth year, the company's dividend growth will be fixed at 3% forever. Calculate the current share price if the required rate of return on this stock is 8% (Do not use the $ sign. If your answer is $ 123.45, then enter 123.45).
- Tip Top Hats (TTH) is expected to grow at a 2 percent rate for as long as it is in business. Currently the company's common stock is selling for $36 per share. The most recent dividend paid by TTH was $2.00 per share. If new common stock is issued, TTH will incur flotation costs equal to 8.0 percent. What is the company's cost of retained earnings? Round your answer to two decimal places. % What is its cost of new common equity? Round your answer to two decimal places. %The earnings, dividends, and stock price of BB Company are expected to grow at 7% per year after this year. BB Company's common stock sells for P23 per share, its last dividend was P2.00 and the company pay P2.14 at the end of the current year. BB Company should pay P2.50 flotation cost. What is the expected cost of new common stock for BB Company using the dividend growth model?The Merriweather Co. just announced that it will pay a dividend next year of $1.60. The company will then increase its dividend by 10 percent per year for two years after which it will maintain a constant 2 percent dividend growth rate. What is one share worth today at a required rate of return of 14 percent?