Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Shellbridge Corporation common stock has a par value of $25 and recently paid a dividend of $4.76 per share. The firm's dividends have grown from $1.50 to $4.76 over the past 10 years, which also reflects the expected growth in dividends for the indefinite future. The stock is selling for $40 and you think a reasonable required
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- A share of common stock has just paid a dividend of $2.00. If the expected long-run growth rate for this stock is 10 percent, and if investors require a 19 percent rate of return, what is the price of the stock?arrow_forwardsuppose south florida energy has preferred stock outstanding that pays an annual dividend of $5.95. If investors' required return is 6.8%, what is the present value of the preferred stock? the common stock is trading for $87.50 per share. 177.75 84.11 96.20 87.50 84.24arrow_forwardSuppose Nabisco Corporation just issued a dividend of $1.41 per share yesterday. Subsequent dividends will grow at a constant rate of 6.15% indefinitely. If the required rate of return for this stock is 15.38% , what is the value of a share of common stock today? What is the value of a share of preferred stock that promises to pay $1.51 every year, indefinitely, if you have a required rate of return of 9.57%?arrow_forward
- M&M Corporation just paid a dividend of $1.55. It is expected to increase its dividend by 2% per year. B&B Corporation is expected to pay a $2.55 dividend in one year. It is expected to grow at 4% per year. The market requires a return of 12% on assets at similar risk level., a) What is the stock price of M&M Corporation? b) What is the stock price of B&B Corporation?arrow_forwardShellbridge Corporation common stock has a par value of $25 and recently paid a dividend of $4.76 per share. The firm's dividends have grown from $1.50 to $4.76 over the past 10 years, which also reflects the expected growth in dividends for the indefinite future. The stock is selling for $40 and you think a reasonable required rate of return is 15%. What is the stock's intrinsic value? O $172.46 O $193.57 $31.73 $35.62 O $101.86arrow_forwardA fast-growing firm recently paid a dividend of $0.85 per share. The dividend is expected to increase at a 20 percent rate for the next four years. Afterwards, a more stable 12 percent growth rate can be assumed. If a 13.5 percent discount rate is appropriate for this stock, what is its value? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Stock valuearrow_forward
- Suppose you know that a company's stock currently sells for $53.47 per share and the required return on the stock is 8.5 percent. You also know that the total return on the stock is evenly divided between capital gains yield and dividend yield. If it's the company's policy to always maintaina constant growth rate in its dividends, what is the current dividend per share? Answer to two decimals.arrow_forwardThe current dividend yield on Ventana common stock is 1.89 percent. The company just paid an annual dividend of $1.56 and announced plans to pay $1.70 next year. The dividend growth rate is expected to remain constant at the current level. What is the required rate of return on this stock? Select one: a. 13.39% b. 12.75% c. 9.08% d. 10.86% e. 15.82%arrow_forward(Common stock valuation) Wayne, Inc.'s outstanding common stock is currently selling in the market for $24. Dividends of $3.01 per share were paid last year, return on equity is 21 percent, and its retention rate is 24 percent. a. What is the value of the stock to you, given a required rate of return of 19 percent? b. Should you purchase this stock? Question content area bottom Part 1 a. Given a required rate of return of 19 percent, the value of the stock to you is $enter your response here. (Round to the nearest cent.)arrow_forward
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