You buy a share of the Ludwig corporation stock for $ 21.60. You expect it to pay dividends of $ 1.06, and $ 1.1384, and 1.2226 in Years 1,2,and 3, respectively, and you expect to sell it at a price of $ 26.76 at the end of 3 years. (a) calculator the growth rate in dividends. ( b) calculator the expected dividends yield.

You buy a share of the Ludwig corporation stock for $ 21.60. You expect it to pay dividends of $ 1.06, and $ 1.1384, and 1.2226 in Years 1,2,and 3, respectively, and you expect to sell it at a price of $ 26.76 at the end of 3 years. (a) calculator the growth rate in dividends. ( b) calculator the expected dividends yield.

Name: You buy a share of the Ludwig corporation stock for $ 21.60. You expec
Uploaded: 2024-03-20T06:51:32.000Z
Channel: Bartleby
Description: You buy a share of the Ludwig corporation stock for $ 21.60. You expect it to pay dividends of $ 1.06, and $ 1.1384, and 1.2226 in Years 1,2,and 3, respectively, and you expect to sell it at a price of $ 26.76 at the end of 3 years. (a) calculator t

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter7: Corporate Valuation And Stock Valuation

Section: Chapter Questions

Problem 18MC

See similar textbooks

Similar questions

You buy a share of The Ludwig Corporation stock for $21.40. You expect it to pay dividends of $1.07, $1.1449, and $1.2250 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $26.22 at the end of 3 years. a. Calculate the growth rate in dividends. b. Calculate the expected dividend yield. c. Assuming that the calculated growth rate is expected to continue, you can add the dividend yield to the expected growth rate to obtain the expected total rate of return. What is this stock’s expected total rate of return? (Assume the market is in equilibrium with the required return equal to the expected return.)
You buy a share of The Ludwig Corporation stock for $21.40. You expect itto pay dividends of $1.07, $1.1449, and $1.2250 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $26.22 at the end of 3 years.a. Calculate the growth rate in dividends.b. Calculate the expected dividend yield.
You buy a share of Damanpour Corporation stock for $21.40. You expect it to pay dividends of $1.07, $1.1149, and $1.2250 in Years 1, 2, and 3 respectively. You also expect to sell the stock at a price of $26.22 at the end of three years. a. Calculate the growth rate in dividends. b. Calculate the expected dividend yield. c. Assuming that the calculated growth rate is expected to continue, you can add the dividend yield to the expected growth rate to determine the expected total rate of return. What is this stock's expected total rate of return?
You buy a share of The Ludwig Corporation stock for $22.40. You expect it to pay dividends of $1.06, $1.1331, and $1.2113 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $27.36 at the end of 3 years. Calculate the growth rate in dividends. Round your answer to two decimal places. % Calculate the expected dividend yield. Round your answer to two decimal places. % Assuming that the calculated growth rate is expected to continue, you can add the dividend yield to the expected growth rate to obtain the expected total rate of return. What is this stock's expected total rate of return (assume market is in equilibrium with the required rate of return equal to the expected return)? Do not round intermediate calculations. Round your answer to two decimal places. %
Assume that you are given the following dividends for your company's common stock for Years 1-5. Also assume that after Year 5, dividends will then grow at a constant growth rate of 4.0 percent. Now assume that the investors require a rate of return of 17.0 percent. Given this information. determine the current price for a share of your company's stock. Year 1 2 3 4 5 O $29.75 O $30.58 $25.46 O $27.44 O $23.72 Dividend $2.40 $3.20 $3.90 $4.50 $5.00
You buy a share of The Ludwig Corporation stock for $20.20. You expect it to pay dividends of $1.03, $1.1103, and $1.1969 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $25.31 at the end of 3 years. Calculate the growth rate in dividends. Round your answer to two decimal places. % Calculate the expected dividend yield. Round your answer to two decimal places.
A stock is selling today for $75 per share. At the end of the year, it pays a dividend of $6 per share and sells for $81. Required: a. What is the total rate of return on the stock? b. What are the dividend yield and percentage capital gain? c. Now suppose the year-end stock price after the dividend is paid is $69. What are the dividend yield and percentage capital gain in this case?
2. Preferred Products has issued preferred stock with an $8 annual dividend that will be paid in perpetuity. a. If the discount rate is 12%, at what price should the preferred sell? (Round your answer to the nearest cent.) b. At what price should the stock sell one year from now? (Round your answer to the nearest cent.) c. What is the dividend yield, the capital gains yield, and the expected rate of return of the stock? (Round your answer to the nearest whole number. If no entry is required, please, enter zero ("0").)
2. Answer both questions: a. You purchase 100 shares of stock for $40 a share. The stock pays a $2 per share dividend at year-end. What is the rate of return on your investment if the year-end stock prices turn out to be $38, $40, and $42? What is your real (inflation-adjusted) rate of return in each case, assuming an inflation rate of 3%? b. Consider the following information on the returns on stock and bond investment. Scenario Profitability Stocks Bonds Recession .2 -5% +14% Normal Economy .6 +15% +8% Boom .2 +25% +4% i) Calculate the expected rate of return and standard deviation in each investment. ii) Do your results support or contradict the historical record on the relationship between risk and return in the financial market in both Canada and the United States? iii) Which investment would you prefer? Explain your answer.
Suppose 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
A stock is selling today for $50 per share. At the end of the year, it pays a dividend of $3 per share and sells for $56. Required: a. What is the total rate of return on the stock? b. What are the dividend yield and percentage capital gain? c. Now suppose the year-end stock price after the dividend is paid is $48. What are the dividend yield and percentage capital gain in this case? A Required What is the total rate of return for the stock? B Required What is the dividend yield and percentage capital gain? C Required Now suppose the year-end stock price after the dividend is paid is $48. What are the dividend yield and percentage capital gain in this case? (Negative amounts should be indicated by a minus sign. Enter your answers as a whole percent.)
A stock is selling today for $75 per share. At the end of the year, it pays a dividend of $6 per share and sells for $87. A. What is the total rate of return on the stock? B. What are the dividend yield and percentage capital gain? C. Now suppose the year-end stock price after the dividend is paid is $72. What are the dividend yield and percentage capital gain in this case?