Suppose the Pale Hose Corp. is expected to pay a dividend next year of OMR2.25 per share. Both sales and profits for Pale Hose are expected to grow at a rate of 20% for the following 2 years and then at 5% per year thereafter indefinitely. Dividend growth is expected to match sales growth. If the required return is 15%, what is the value of a share of Pale Hose?
Q: Sportman company uses a required expected return of 12 percent. because the dividend expected to be…
A: Required return (r) = 12% Growth rate (g) = 6% Dividend in two years (d2) = $2.12
Q: Topstone Industries is expected to pay a dividend of $2.10 per share in one year. This dividend,…
A: Cost of equity Ke=D1MP+g Ke=Cost of equity D1=Expected dividend per share at the end of the year…
Q: The Data General Company is expected to pay an annual dividend of $2.53 at the end of the year.…
A: Computation of required rate of return:Required rate of return is 15.81%.Excel spread sheet:
Q: Assume that XYZ Ltd has a current growth rate of 10% p.a. that is expected to be maintained for only…
A: Financial Management: Financial management comprises of two words i.e. Finance and management.…
Q: what price does the dividend-discount model predict Colgate stock should sell for today?
A: Dividend Discount Model: It is a quantitative model used for estimating the price of the stock. The…
Q: Suppose that MTA is expected to pay $4.00 in cash dividends next year at the rate of $1.00 per…
A: A model that helps to evaluate the value of the stock with the assumption that the dividend will…
Q: Laurel Enterprises expects earnings next year of $4.29 per share and has a 50% retention rate,…
A: Earning per share = $4.29 Payout ratio = 100%-Retention ratio = 100%-50%…
Q: Upsilon Utilities Inc. expects a constant growth rate of 2% in its dividend payments. If the company…
A: The expected dividend in year 1 (D1) is $3. The growth rate (g) is 2%. The current share price (P)…
Q: Universal Exports is expected to pay the following dividends over the next four years: $8, $4, $2,…
A: Using Dividend Discount Model
Q: Babbalu Inc. just paid a dividend of $1 per share. Babbalu expects to increase its annual dividend…
A: Current value of share can be calculated by computing the present value of all the future dividends.…
Q: A firm will pay an annual dividend of $6 on its common stock in one year, and its dividend will grow…
A: Next dividend (D1) = $6 Growth rate = g Stock price (P0) = $88 Cost of equity (r) = 12%
Q: A firm’s earnings and dividends per share are expected to grow constantly by 5% a year. If next…
A: Solution- Given that Expected growth rate=5% (per year) Next year dividend=£0.85 Market…
Q: Micro Systems just paid an annual dividend of $0.2 per share. Its dividend is expected to double for…
A: Annual Dividend = $0.2 Growth for 4 years = double Growth after 5 years = 2% Required rate of…
Q: Suppose a firm is expected to increase dividends by 20% in one year and by 15% in two years. After…
A: The price of the stock refers to the price at which the stock is trading in the stock market. Stock…
Q: Assume that BHF Ltd has a current growth rate of 10% p.a. that is expected to be maintained for only…
A: Financial Management: Financial management comprises of two words i.e. Finance and management.…
Q: Stars Ltd is expected to pay a dividend of $0.80 one year from now. Its share price today is $24 and…
A: As per Bartleby answering guidelines answered only the first question. Kindly post the other…
Q: Jone Corporation will pay an annual dividend of $0.65 one year from now. Analysts expect this…
A: Dividend discounting model is a tool used to estimate the current price of the stock of a company.…
Q: MCK Bhd paid a dividend of RM2 per share last year. The growth rate in dividend is expected to be 4%…
A: given, D0=RM2r=10%g=7% The growth rate in dividend is expected to be 4% for the first year, 5% for…
Q: . HighGrowth Company has a stock price of $19. The firm will pay a dividend next year of $0.88, and…
A: Next dividend (D1) = 0.88 Current price (P0) = $19 Growth rate (G) = 4.1%
Q: Simon Fixtures Corp. is expected to pay $2.00 per share in dividends at the end of the year. The…
A: Gordon Model can be used to calculate the theoretical current market price of the share with the…
Q: Momsen Corp. is experiencing rapid growth. Dividends are expected to grow at 25percent per year…
A: Since there are no dividends provided here, it is necessary to calculate the dividends for the…
Q: Could I Industries just paid a dividend of $1.10 per share. The dividends are expected to grow at a…
A: Given that;Recent dividend is $1.10Expected growth rate of dividends for next 6 years is 20%Constant…
Q: HighGrowth Company has a stock price of $20. The firm will pay a dividend next year of $1.00, and…
A: Cost of capital = [ ( Expected Dividend / Current Price ) + Growth rate ]
Q: XYZ Inc’s most recent dividend was $20 per share. Dividends are expected to grow at an 9% annual…
A: Recent Dividend = 20 Growth rate = 9% Required rate of return = 15% Using Constant Growth Model,…
Q: Suppose your company is expected to grow at a constant rate of 7 percent long into the future. In…
A: Growth rate = 7% Dividend yield = 8% Year end dividend = $ 1.22
Q: ABC Inc., is expected to pay an annual dividend of $5.1 per share next year. The required return is…
A: A model that helps to evaluate the value of the stock with the assumption that the dividend will…
Q: Procter & Gamble will pay an annual dividend of $0.8 one year from now. Analysts expect this…
A:
Q: Omicron Company has just paid a dividend of $2 per share. Analysts of the company’s shares estimate…
A: Given: Just paid Dividend= $2 Super normal growth rate = 30% expected growth rate = 15% Constant…
Q: Laurel Enterprises expects earnings next year of $4.00 per share and has a 40% retention rate,…
A: A stock (also called equity) is a financial instrument that represents ownership of a portion of a…
Q: Prima Corporation’s dividend per share next year is expected to be RM3.02 and the firm expects…
A: Dividend growth model is a method of valuation of stock, where the dividend paid by the company…
Q: The stock of Z-Tech Plc is currently selling for £10 per share. Earnings per share in the coming…
A: Dividend Gordon's model suggests that dividend policy is relevant and can affect the value of…
Q: A company is currently paying dividend of Tk. 40 per share. The dividend is expected to grow at a…
A: Dividend = Tk. 40 The expected growth rate for 2 years = 20% The expected growth rate for the next…
Q: Harmony Corporation will pay a dividend of RM1.50 a share next year. After this, earnings and…
A: A company has several sources from where it can raise funds. It can issue equity shares and the…
Q: Lily’s Show is expected to pay an annual dividend of RM0.80 a share next year. The market price of…
A: Hello. Since you have posted multiple questions and not specified which question needs to be solved,…
Q: IBRA company has an expected dividend next year of $5.60 per share, a growth rate of the dividends…
A: The price at which the stock is traded in the market is referred to as the value of the stock,…
Q: Macro Systems just paid an annual dividend of $0.32 per share. Its dividend is expected to double…
A: We will calculate the price using dividend discount model (DDM). As per DDM, price of a stock is…
Q: Arts and crafts will pay a divided of $5 per share in 1 year. It sells at $50 a share, and firms in…
A: As per dividend discount model, Price of stock = Dividend at the end of year 1 /(expected return -…
Q: Deployment Specialists pays a current (annual) dividend of $1.00 and is expected to grow at 20% for…
A: The calculation of the stock’s intrinsic value is as follows:
Q: Spacefood Products will pay a dividend of $2.15 per share this year. It is expected that this…
A: Expected Divided (D1) = $2.15Cost of Equity (Ke) = 14%Growth Rate (g) = 6% Calculation of Current…
Q: HighGrowth Company has a stock price of $21. The firm will pay a dividend next year of $1.01, and…
A: Given: Stock Price(P0 )=$21Dividend paid next year (D1)=$1.01Expected growth rate of dividend…
Q: HighGrowth Company has a stock price of $18. The firm will pay a dividend next year of $1.15, and…
A: Stock price (P0) = $18 Next dividend (D1) = $1.15 Growth rate (g) = 3.5%
Q: Hamilton Landscaping's dividend growth rate is expected to be 30% in the next year, drop to 15% from…
A: Current price of the stock is the present value of the future dividend and horizon value to be…
Q: The stock of Nogro Corporation is currently selling for $10 per share. Earnings per share in the…
A: a. The computation of the rate of return required as follows: The formulae used for the computation…
Q: The FI Corporation's dividends per share are expected to grow indefinitely by 7% per year. a. If…
A: a) Growth rate = 7% D1 =$10 Ke = 12%
Q: Orkazana Corp is expecting rapid growth. Dividends are expected to grow at 25% per year during the…
A: In this we have to use constant growth model of dividend.
Q: Summit Systems will pay a dividend of $1.50 this year. If you expect Summit’s dividend to grow by 6%…
A: The below expression can be used to calculate price per share:
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
- Suppose TB Pirates, Inc. is expected to pay a $2dividend in one year. If the dividend is expected togrow at 5% per year and the required return is 20%,what is the price?XYZ is expected to pay 30.06 dividend next year. The dividend is expected to grow at 50% per annum in the 2nd and the 3rd year, at 20% per annum in the 4th and 5th year, and at 5% p.a. thereafter. If the required rate of return is 12 %, what is the value per share?Suppose TB Pirates, Inc. is expected to pay a $2 dividend in one year. If the dividend is expected to grow at 5% per year and the required return is 15%, what is the price? Respuesta:
- The Toy Chest will pay an annual dividend of $2.64 per share next year and currently sells for $48.30 a share based on a market return of 11.67 percent. What is the capital gains yield? Can the calculator and excel solution be provided?Assume XYZ Corp's dividend payment will be $3.12 one year from now, $3.85 two years from now, and $4.12 three years from now. Further assume that after these three years, the dividend will grow by 4.5% each year. If the required rate of return for the industry XYZ Corp. belongs to is 10.7%, what is the market value of XYZ Corp.'s stock under the Dividend Discount Model? O $71.24 Ⓒ$65.45 O $60.19 O $55.72News Corp is expected to pay a dividend of $0.8 in one year. The dividend is expected to grow at 12% in the following 3 years and then at a constant rate of 4% per annum indefinitely. If the required rate of return is 12%, what is the price of the company's share today? Please illustrate your answer using a timeline.
- MCK Bhd paid a dividend of RM2 per share last year. The growth rate in dividend is expected to be 4% for the first year, 5% for the second year, and then 6% for the third year. The growth rate is expected to be constant at 7% per year thereafter. The required rate of return is 10%. If your remisier recommends that you buy this share at the current market price of RM65, should you agree?Trail Co. is expected to pay a cash dividend of $2.60 next year. This dividend isexpected to grow at 5% to infinity. If you require a return of at least 9%, what is themost you should be willing to pay for this share? Please use finance calculator and show the workingsA company is currently paying dividend of Tk. 40 per share. The dividend is expected to grow at a 20% annual rate for two years, then at 15% rate for the next two years and then at 10% rate for the next two years, after which it is expected to grow at a 5% rate forever. What should be the current price of the share if required rate of return is 12%? (Consider upto 3 decimal placein case of all fractions).
- EM is expected to gain a $1.40 EPS next year, dividend payout ratio will be 60 percent. The dividend is expected to grow at a 35 percent annual rate for Year 2, at a 30 percent for Year 3, at 18 percent annually for the next 5 years, and at constant percent annually after it . ROE for long term period of time is 15 percent. If the required rate of return is 12 percent, what is the value per share?Show Detailed Steps When Solving The Following Question: Gordon Growth Company is expected to pay a dividend of $4 next period, and dividends are expected to grow at 6% per year. The required return is 16%. What is the current price? What is the price expected to be in year 4?A company's next dividend is USD6.5 which is expected to remain stable in the coming years, till perpetuity. Your required rate of return is 16%. a. How much will you offer to buy this stock at? b. If the dividends will grow at a rate of 4% per year, what will be the dividend that the company will distribute in year 16? C. If the dividends will grow at a rate of 2%, what will be the price of the stock in year 9?