You've collected the following information from your favorite financial website. 52-Week Price Lo 10.43 33.42 Georgette, Incorporated 1.54 70.00 YDM 2.50 13.95 Manta Energy .80 20.74 Winter Sports .32 HL 77.40 55.81 131.03 50.24 35.00 Stock (Dividend) Current stock price Acevedo .36 Dividend PE Yield 2.6 3.8 "T 2.8 5.2 1.5 Ratio 6 10 10 6 28 Close Price. 13.90 40.43 89.07 15.43 77 According to analysts, the growth rate in dividends for YBM for the next five years is expected to be 20.5 percent. Suppose YBM meets this growth rate in dividends for the next five years and then the dividend growth rate falls to 5.5 percent, indefinitely. Assume investors require a return of 15 percent on YBM stock. According to the dividend growth model, what should the stock price be today Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Net Change -.24 -.01 3.07 -.26 .10
You've collected the following information from your favorite financial website. 52-Week Price Lo 10.43 33.42 Georgette, Incorporated 1.54 70.00 YDM 2.50 13.95 Manta Energy .80 20.74 Winter Sports .32 HL 77.40 55.81 131.03 50.24 35.00 Stock (Dividend) Current stock price Acevedo .36 Dividend PE Yield 2.6 3.8 "T 2.8 5.2 1.5 Ratio 6 10 10 6 28 Close Price. 13.90 40.43 89.07 15.43 77 According to analysts, the growth rate in dividends for YBM for the next five years is expected to be 20.5 percent. Suppose YBM meets this growth rate in dividends for the next five years and then the dividend growth rate falls to 5.5 percent, indefinitely. Assume investors require a return of 15 percent on YBM stock. According to the dividend growth model, what should the stock price be today Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Net Change -.24 -.01 3.07 -.26 .10
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
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Transcribed Image Text:You've collected the following information from your favorite financial website.
52-Week Price
LO
10.43
33.42
70.00
13.95
20.74
Hi
77.40
55.81
131.03
50.24
35.00
Stock (Dividend)
Current stock price
Acevedo .36
Georgette, Incorporated 1.54
YBM 2.50
Manta Energy .80
Winter Sports .32
Dividend PE
Yield &
2.6
3.8
2.8
5,2
1.5
Ratio
6
10
10
6
28
Close
Price.
13.90
40.43
89.07
15.43
??
Net Change
-.24
-.01
3.07
-.26
.18
According to analysts, the growth rate in dividends for YBM for the next five years is expected to be 20.5 percent. Suppose YBM
meets this growth rate in dividends for the next five years and then the dividend growth rate falls to 5.5 percent, indefinitely. Assume
investors require a return of 15 percent on YBM stock. According to the dividend growth model, what should the stock price be today?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
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