Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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XYZ corp expects to earn $4.3 per share next year and plow back 41.86% of its earnings (i.e., it expects to pay out a dividend of $2.5 per share, representing 58.14% of its earnings). The dividends are expected to grow at a constant sustainable growth rate and the stocks are currently priced at $30 per share. How much of the stock's $30 price is reflected in
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- The XYZ Company paid $1.75 dividend yesterday. Its dividend growth rate is expected to be constant at 24.50% for 2 years, after which dividends are expected to grow at a rate of 5.65% forever. Its required return (rs) is 10.15%. What is the best estimate of the current stock price?arrow_forwardKrell Industries has a share price of $21.92 today. If Krell is expected to pay a dividend of $1.11 this year and its stock price is expected to grow to $24.16 at the end of the year, what is Krell's dividend yield and equity cost of capital? The dividend yield is %. (Round to one decimal place.) %. (Round to one decimal place.) The total return is %. (Round to one decimal place.) The capital gain rate isarrow_forwardJumbo Corp. is experiencing rapid growth. Dividends are expected to grow at 30 percent per year during the next three years, 18 percent over the following year, and then 8 percent per year indefinitely. The required return on this stock is 13 percent, and the stock currently sells for K65 per share. What is the projected dividend for thecoming year?arrow_forward
- The firm just paid an annual dividend of $0.8 per share and plans to increase that amount by 25% next year. After that, the firm expects the dividend will grow by 3% annually. What is the expected value of this stock next year if the required return is 13 percent? 9.9 O 10.3 10.2arrow_forwardA&T, Inc. paid an annual dividend of $1.47 per share last month. The company is planning on paying $1.56, $1.68, and $1.75 per share over the next three years, respectively. After that, the dividend will be constant at $1.80 per share per year. What is the market price of this stock if the market rate of return is 12 percent? $13.98 $14.65 $13.54 $14.16 O None of these answers are correctarrow_forwardPortman Industries just paid a dividend of $1.92 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 16.00% over the next year. After the next year, though, Portman’s dividend is expected to grow at a constant rate of 3.20% per year. The risk-free rate (rRFrRF) is 4.00%, the market risk premium (RPMRPM) is 4.80%, and Portman’s beta is 2.00. What is the dividents one year from now? What is the Horizon value? What is the Intrinsic value?arrow_forward
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