What is the Value of the common stock? if the common stock has an annual dividend of $200 per share and the required return on common stock is 8% and assume to grow at a constant rate of 4% in dividends?
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another solution and answer for this problem
What is the Value of the common stock?
if the common stock has an annual dividend of $200 per share and the required return on common stock is 8% and assume to grow at a constant rate of 4% in dividends?
choose the best answer:
A. 3030.33
B. 3,333.33
C.3300.33
D. 3633.33
Step by step
Solved in 2 steps
- (1) Write out a formula that can be used to value any dividend-paying stock, regardless of its dividend pattern. (2) What is a constant growth stock? How are constant growth stocks valued? (3) What happens if a company has a constant gL that exceeds its rs? Will many stocks have expected growth greater than the required rate of return in the short run (i.e., for the next few years)? In the long run (i.e., forever)?What is the Value of the common stock? if the common stock has an annual dividend of $200 per share and the required return on common stock is 8% and assume to grow at a constant rate of 4% in dividends? choose the best answer: A. 3030.33 B. 3,333.33 C.3300.33 D. 3633.33The dividend-growth model may be used to value a stock: Do(1+9) V = k - g Round your answers to the nearest cent. a. What is the value of a stock if: Do = $3.10 k = 12% 9 = 8% b. What is the value of this stock if the dividend is increased to $4.30 and the other variables remain constant? $ c. What is the value of this stock if the required return declines to 9 percent and the other variables remain constant? d. What is the value of this stock if the growth rate declines to 5 percent and the other variables remain constant? e. What is the value of this stock if the dividend is increased to $3.70, the growth rate declines to 5 percent, and the required return remains 12 percent? $
- The dividend-growth model may be used to value a stock: Round your answers to the nearest cent. a. What is the value of a stock if: Do = $2.30 k = 8% 9 = 5% V = Do(1+g) k-9 $ b. What is the value of this stock if the dividend is increased to $4.30 and the other variables remain constant? $ c. What is the value of this stock if the required return declines to 6 percent and the other variables remain constant? $ d. What is the value of this stock if the growth rate declines to 3 percent and the other variables remain constant? $ e. What is the value of this stock if the dividend is increased to $2.90, the growth rate declines to 3 percent, and the required return remains 8 percent? $Answer the multiple-choice question below: 1.If you buy a stock for a price of $23 and if you expect the stock to pay a dividend of $1.242 one year from now and to grow at a constant rate g = 8% in the future, then the required rate of return will be __________. Select one: a.12.4% b.20.4% c.13.4% d.14.5%The dividend-growth model may be used to value a stock: Round your answers to the nearest cent. V=D0(1+g) / k-g What is the value of a stock if:D0 = $2.50k = 10%g = 6% $ What is the value of this stock if the dividend is increased to $4.40 and the other variables remain constant? $ What is the value of this stock if the required return declines to 7.5 percent and the other variables remain constant? $ What is the value of this stock if the growth rate declines to 4 percent and the other variables remain constant? $ What is the value of this stock if the dividend is increased to $3.20, the growth rate declines to 4 percent, and the required return remains 10 percent? $
- A. What is the investor's required rate of return for Green Gadgets' stock? ________% (round to two decimal paces) B. Assuming that the investor's required rate of return for Green Gadget's stock does not change, what would you expect to happen to the price of its common stock if it cuts dividend to $3? $_______ (round to the nearest cent) C. Should Green Gadgeds cut its dividend? ( select from the drop down menus) Green Gadgets Should / Should not cut the dividend because cutting the dividend will increase / decrease the value of the common stock.Answer the multiple-choice question below: 1. WICB’s stock’s intrinsic value is $48.40, the required rate of return is 12.5 percent and the dividend growth rate is 10 percent, what is WICB’s recent dividend? Select one: a. $1.21 b. $4.80 c. $1.25 d. $0.20 e. $1.10Suppose you have just purchased a share of stock for $58.50. You expect a dividend next period of $2.50 which will grow at a rate of 15% indefinitely. What must your expected rate of return be on the stock you have just purchased? Select one: A. 4.27% B. 15.38% C. 19.27% D. 19.91% E. None of the above
- The dividend-growth model may be used to value a stock: Round your answers to the nearest cent. What is the value of a stock if:D0 = $5.00k = 12%g = 6% $ What is the value of this stock if the dividend is increased to $6.50 and the other variables remain constant? $ What is the value of this stock if the required return declines to 11 percent and the other variables remain constant? $ What is the value of this stock if the growth rate declines to 3 percent and the other variables remain constant? $ What is the value of this stock if the dividend is increased to $6.50, the growth rate declines to 3 percent, and the required return remains 12 percent? $The dividend-Growth model may be used to value a stock: V= D0 (1+g) / k-g What is the value of a stock if : D0 = $2 k = 10% g = 6% What is the value of this stock if the dividend is increased to $3and the other variables remain constant? What is the value of this stock if the required return declines to 7.5 percent and the other variable remains constant? What is the value of this stock if the growth rate declines to 4 percent and the other variables remain constant? What is the value of this stock if the dividend is increased to $2.30, the growth rate declines to 4 percent, and the required return remains 10 percent?1. An analyst estimates that a stock will pay a $1 dividend next year and that it will sell for $40 at year-end. If the required rate of return is 14%, what is the value of the stock? A. $34.60. B. $35.52. C. $35.96. Please provide an accurte answer.
