Procter and Gamble (PG) paid an annual dividend of $2.87 in 2018. You expect PG to increase its dividends by 8% per year for the next five years (through 2023), and thereafter by 3% per year. If the appropriate equity cost of capital for Procter and Gamble is 8% per year, use the dividend-discount model to estimate its value per share at the end of 2018. A) Calculate the present value of dividends through 2023. B) Calculate the present value of the rest of the dividends in 2023 C) USING the function PV in EXCEL, calculate the present value of the rest of the dividends in 2018 D) Calculate the value per share of Procter and Gamble at the end of 2018

Procter and Gamble (PG) paid an annual dividend of $2.87 in 2018. You expect PG to increase its dividends by 8% per year for the next five years (through 2023), and thereafter by 3% per year. If the appropriate equity cost of capital for Procter and Gamble is 8% per year, use the dividend-discount model to estimate its value per share at the end of 2018. A) Calculate the present value of dividends through 2023. B) Calculate the present value of the rest of the dividends in 2023 C) USING the function PV in EXCEL, calculate the present value of the rest of the dividends in 2018 D) Calculate the value per share of Procter and Gamble at the end of 2018

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 12P

See similar textbooks

Similar questions

Procter and Gamble (PG) paid an annual dividend of $2.86 in 2018. You expect PG to increase its dividends by 8.7% per year for the next five years (through 2023), and thereafter by 2.7% per year. If the appropriate equity cost of capital for Procter and Gamble is 8.3% per year, use the dividend-discount model to estimate its value per share at the end of 2018.
Procter and Gamble (PG) paid an annual dividend of $2.79 in 2018. You expect PG to increase its dividends by 7.9% per year for the next five years (through 2023), and thereafter by 2.7% per year. If the appropriate equity cost of capital for Procter and Gamble is 8.9% per year, use the dividend-discount model to estimate its value per share at the end of 2018. * please show work
Procter and Gamble (PG) paid an annual dividend of $2.81 in 2018. You expect PG to increase its dividends by 8.6% per year for the next five years (through 2023), and thereafter by 3.1% per year. If the appropriate equity cost of capital for Procter and Gamble is 8.1% per year, use the dividend-discount model to estimate its value per share at the end of 2018. The price per share is $ (Round to the nearest cent.)
Procter and Gamble (PG) paid an annual dividend of $2.89 in 2018. You expect PG to increase its dividends by 7.7% per year for the next five years (through 2023), and thereafter by 3.3% per year. If the appropriate equity cost of capital for Procter and Gamble is 8.7% per year, use the dividend-discount model to estimate its value per share at the end of 2018. (Round to the nearest cent.)
Procter and Gamble (PG) paid an annual dividend of $2.94 in 2021. You expect PG to increase its dividends by 7.1% per year for the next five years (through 2026), and thereafter by 2.6% per year. If the appropriate equity cost of capital for Procter and Gamble is 8.9% per year, use the dividend-discount model to estimate its value per share at the end of 2021.
Assume today is December 31, 2019. Imagine Works Inc. just paid a dividend of $1.30 per share at the end of 2019. The dividend is expected to grow at 18% per year for 3 years, after which time it is expected to grow at a constant rate of 5% annually. The company's cost of equity (rs) is 9%. Using the dividend growth model (allowing for nonconstant growth), what should be the price of the company's stock today (December 31, 2019)? Do not round intermediate calculations. Round your answer to the nearest cent.
pm.2 Procter and Gamble (PG) paid an annual dividend of $2.83 in 2021. You expect PG to increase its dividends by 8.1% per year for the next five years (through 2026), and thereafter by 3.4% per year. If the appropriate equity cost of capital for Procter and Gamble is 8.2% per year, use the dividend-discount model to estimate its value per share at the end of 2021. Question content area bottom Part 1 The price per share is ?
Assume today is December 31, 2019. Imagine Works Inc. just paid a dividend of $1.10 per share at the end of 2019. The dividend is expected to grow at 12% per year for 3 years, after which time it is expected to grow at a constant rate of 6% annually. The company's cost of equity (rs) is 9%. Using the dividend growth model (allowing for nonconstant growth), what should be the price of the company's stock today (December 31, 2019)? Do not round intermediate calculations. Round your answer to the nearest cent.$______ per share
Forever 21 is expected to pay an annual dividend of $3.46 per share in one year, which is then expected to grow by 9% per year indefinitely. Suppose the company's stock should earn an appropriate yearly return of 14% determined by Capital Asset Pricing Model (CAPM). Using Dividend Discount Model to find the appropriate stock price.
The earnings, dividends, and stock price of Shelby Inc. are expected to grow at 8% per year in the future. Shelby's common stock sells for $30 per share, its last dividend was $1.50, and the company will pay a dividend of $1.62 at the end of the current year. Using the discounted cash flow approach, what is its cost of equity? Round your answer to two decimal places. % If the firm's beta is 1.8, the risk-free rate is 10%, and the expected return on the market is 12%, then what would be the firm's cost of equity based on the CAPM approach? Round your answer to two decimal places. % If the firm's bonds earn a return of 10%, then what would be your estimate of rs using the own-bond-yield-plus-judgmental-risk-premium approach? (Hint: Use the mid-point of the risk premium range.) Round your answer to two decimal places. % On the basis of the results of parts a–c, what would be your estimate of Shelby's cost of equity? Assume Shelby values each approach equally. Round your answer…
At the end of the year 2020 Brown Bear Corporation paid dividends $3.58 per share. The company projects the following annual growth rates in dividends: Year Growth Rate 2021 13% 2022 13% 2023 13% 2024 11% 2025 8% 2026 4% From year 2027 onward growth in dividends is expected to remain constant at 3% per year. The required rate of return for this stock is 12.06%. Calculate the economic value of the stock now (end of the Year 2020). Your Answer:
At the end of the year 2020 Brown Bear Corporation paid dividends $3.39 per share. The company projects the following annual growth rates in dividends: Year Growth Rate 2021 13% 2022 13% 2023 13% 2024 11% 2025 6% 2026 4% From year 2027 onward growth in dividends is expected to remain constant at 3% per year. The required rate of return for this stock is 12.16%. Calculate the economic value of the stock now (end of the Year 2020).