You require an 11 percent return on your investment. Big business Corp. will pay a $3.60 per share dividend next year. The company pledges to increase its dividend by 4.5 percent per year indefinitely. How much will you pay for the company’s stock today? Suppose the company also has a preferred stock which sells for $113 per share and pays a $6.50 dividend every year in perpetuity. What is its required return?
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You require an 11 percent
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- Torbay Corporation will pay a $3.40 per share dividend next year. The company pledges to increase its dividend by 4.5% per year indefinitely. If you require an 11% return on your investment, how much will you pay for the company,s stock today?Hudson Corporation will pay a dividend of $3.10 per share next year. The company pledges to increase its dividend by 3.40 percent per year indefinitely. If you require a return of 6.50 percent on your investment, how much will you pay for the company's stock today?White Wedding Corporation will pay a $3.35 per share dividend next year. The company pledges to increase its dividend by 4.34 percent per year, indefinitely. If you require a 10 percent return on your investment, how much will you pay for the company's stock today? Value of a stock
- Zion Inc. will pay a $4.25 per share dividend in year 5. The company pledges to increase its dividend by 5% (g) per year indefinitely. If you require a 10% return (r) on your investment, how much will you pay for the company’s stock today (Po)?Five Star Corporation will pay a dividend of $4.15 per share next year. The company pledges to increase its dividend by 6.25 percent per year, indefinitely. If you require a return of 9 percent on your investment, how much will you pay for the company’s stock today?You believe that the Non-Stick Gum Factory will pay a dividend of $5 on its common stock next year. Thereafter, you expect dividends to grow at a rate of 1% a year in perpetuity. If you require a return of 12% on your investment, how much should you be prepared to pay for the stock? What is the Stock Price?
- The Kempton Company just announced that it will be increasing its annual dividend to $1.88 next year and that future dividends will be increased by 3.5% annually. How much would you be willing to pay for one share of the Kempton Company stock if you require a 12% rate of return?ABC Industries will pay a dividend of $1 next year on their common stock. The company predicts that the dividend will increase by 5 percent each year indefinitely. What is the firm's cost of equity if the stock is selling for $30 a share?You intend to buy Berrymore Inc.’s common stock at $100 per share, hold it one year and sell after that. The firm paid a $5 per share dividend last year and its dividends are expected to grow at an annual rate of 7% for indefinite number of years. If you can sell the stock at $110, what is your expected rate of return?