You've collected the following information from your favorite financial website. 52-Week Price Div Hi Lo Stock (Div) Yld PE Close Net % Ratio Price Chg 6 13.90 -.24 77.40 10.43 Palm Coal .36 2.6 55.81 33.42 Lake Lead Grp 1.54 3.8 10 40.43 -.01 130.93 69.50 SIR 2.00 2.2 10 88.97 3.07 50.24 13.95 DR Dime .80 6 15.43 -.26 5.2 1.5 28 35.30 20.77 Candy Galore 0.35 ?? .18 a. Using the dividend yield, calculate the closing price for Candy Galore on this day. (D not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Assume the actual closing price for Candy Galore was $23.02. Your research project a 4.75 percent dividend growth rate for Candy Galore. What is the required return fo the stock using the dividend discount model and the actual stock price? (Do not rou intermediate calculations and enter your answer as a percent rounded to 2 decim places, e.g., 32.16.) a. Stock price b. Required return %

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
icon
Related questions
Question
You've collected the following information from your favorite financial website.
52-Week Price
Div
Yld
PE Close Net
Ratio Price Chg
Hi
Lo
Stock (Div)
%
77.40
10.43
Palm Coal .36
2.6
6 13.90
.24
55.81
33.42
Lake Lead Grp 1.54
3.8
10 40.43
-.01
130.93
69.50
SIR 2.00
2.2
10
88.97 3.07
50.24
13.95
DR Dime .80
5.2
6 15.43 -.26
.18
35.30
20.77
Candy Galore 0.35
1.5
28
??
a. Using the dividend yield, calculate the closing price for Candy Galore on this day. (Do
not round intermediate calculations and round your answer to 2 decimal places,
e.g., 32.16.)
b. Assume the actual closing price for Candy Galore was $23.02. Your research projects
a 4.75 percent dividend growth rate for Candy Galore. What is the required return for
the stock using the dividend discount model and the actual stock price? (Do not round
intermediate calculations and enter your answer as a percent rounded to 2 decimal
places, e.g., 32.16.)
a.
Stock price
b. Required return
%
Transcribed Image Text:You've collected the following information from your favorite financial website. 52-Week Price Div Yld PE Close Net Ratio Price Chg Hi Lo Stock (Div) % 77.40 10.43 Palm Coal .36 2.6 6 13.90 .24 55.81 33.42 Lake Lead Grp 1.54 3.8 10 40.43 -.01 130.93 69.50 SIR 2.00 2.2 10 88.97 3.07 50.24 13.95 DR Dime .80 5.2 6 15.43 -.26 .18 35.30 20.77 Candy Galore 0.35 1.5 28 ?? a. Using the dividend yield, calculate the closing price for Candy Galore on this day. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Assume the actual closing price for Candy Galore was $23.02. Your research projects a 4.75 percent dividend growth rate for Candy Galore. What is the required return for the stock using the dividend discount model and the actual stock price? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Stock price b. Required return %
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Income Statement Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education