Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Chapter 13, Problem 5PS
Jand, Inc, currently pays a dividend of
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What is the required rate of return on a share whose value is Kshs 62.50, its upcoming dividend is Kshs 5 and the growth rate is 4%?
The next dividend payment by Hoffman, Inc.,
will be $3.05 per share. The dividends are
anticipated to maintain a growth rate of 6 percent forever. Assume the stock currently
sells for $49.70 per share
a. What is the dividend yield? (Do not round intermediate calculations and enter your
answer as a percent rounded to 2 decimal places, e.g. 32.16.)
b. What is the expected capital gains yie d? (Do not round intermediate calculations
and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
%
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yield
Westpac pays a current dividend of $0.5, which is expected to grow at a rate of 4% indefinitely. The required rate of return agreed by Westpac shareholders is 6%. What is the current value of the Westpac share based on the constant-growth dividend discount model (DDM)?
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$23
b.
$20
c.
$8.67
d.
$25
e.
$26
Chapter 13 Solutions
Essentials Of Investments
Ch. 13 - Prob. 1PSCh. 13 - Prob. 2PSCh. 13 - If a security is underpriced [Lew intrinsic value...Ch. 13 - Deployment Specialists pays a current (annual)...Ch. 13 - Jand, Inc, currently pays a dividend of 1.22,...Ch. 13 - A firm pays a current dividend of 1, which is...Ch. 13 - Tri-coat Paints has a current market value of 41...Ch. 13 - A firm has current assets that could be sold for...Ch. 13 - Prob. 9PSCh. 13 - Miltmar Corporation will pay a year-end dividend...
Ch. 13 - Sisters Corp. expects to earn 6 per share next...Ch. 13 - Eagle Products’ EBIT is 300 , its tax rate is 21 ,...Ch. 13 - FinCorp’s free cash flow to the firm is reported...Ch. 13 - A common stock pays an annual dividend per share...Ch. 13 - The risk-free rate of return is 5 , the required...Ch. 13 - Explain why the following statements are...Ch. 13 - a. Computer stocks currently provide an expected...Ch. 13 - Prob. 18PSCh. 13 - a. MF Corp. has an ROE of 16 and a plowback ratio...Ch. 13 - The market consensus is that Analog Electronic...Ch. 13 - The FE Corporation’s dividends per share are...Ch. 13 - The stock of Negro Corporation is currently...Ch. 13 - The risk-free rate of return is 8 , the expected...Ch. 13 - Prob. 24PSCh. 13 - Chiptech, Inc., is an established computer Chip...Ch. 13 - Prob. 1CPCh. 13 - 2. Phoebe Black‘s investment club wants to buy the...Ch. 13 - Prob. 3CPCh. 13 - Prob. 4CPCh. 13 - Prob. 5CPCh. 13 - 7. Shaar (from the previous problem) has revised...Ch. 13 - Prob. 8CP
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- Franklin Corporation is expected to pay a dividend of $1.24 per share at the end of the year (D1 = $1.24). The stock sells for $32.40 per share, and its required rate of return is 7.2%. The dividend is expected to grow at some constant rate, g, forever. What is the equilibrium expected growth rate? (Round your answer to 2 decimal places.) Please work out the problem do not use excel.arrow_forwardThe Evanec Company’s next expected dividend, D1, is $3.18; its growth rate is 6%; and its common stock now sells for $36.00. New stock (external equity) can be sold to net $32.40 per share.a. What is Evanec’s cost of retained earnings, rs?b. What is Evanec’s percentage flotation cost, F?c. What is Evanec’s cost of new common stock, re?arrow_forwardDietterich Electronics wants its shareholders to earn a return of 8% on their investment in the company. At what price would the stock need to be priced today if Dietterich Electronics had a a. $0.20 constant annual dividend forever? b. $1.10 constant annual dividend forever? c. $1.90 constant annual dividend forever? d. $2.70 constant annual dividend forever?arrow_forward
- Jand, Inc., currently pays a dividend of $1.22, which is expected to grow indefinitely at 5%. If the current value of Jand’s shares based on the constant-growth dividend discount model is $32.03, what is the required rate of return?arrow_forward3 Suppose XYZ Corp. paid $20 in dividend this period, dividend growth is 5%, and your rate of time preference or required rate of return is 15%. If you wish to purchase this stock and hold it for multiple period, what price will you pay for this stock?arrow_forwardThe next dividend payment by Hoffman, Inc., will be $2.60 per share. The dividends are anticipated to maintain a growth rate of 6.25 percent forever. Assume the stock currently sells for $48.80 per share. a. What is the dividend yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the expected capital gains yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. b. Dividend yield Capital gains yield ▶ % %arrow_forward
- The next dividend payment by Hoffman, Inc., will be $2.60 per share. The dividends are anticipated to maintain a growth rate of 6.25 percent forever. Assume the stock currently sells for $48.80 per share. a. What is the dividend yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the expected capital gains yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Dividend yield b. Capital gains yield % %arrow_forwardGazelle Motors paid a dividend of MUR 2(i.e., Do = MUR2.00). The dividend is expected to grow by 90% during Year 1, by 50% during Year 2, and then at a constant rate of 5% thereafter. If the required rate of return is 12%, what is the value of the stock today?arrow_forwardThe next dividend payment by Hoffman, Inc., will be $2.75 per share. The dividends are anticipated to maintain a growth rate of 7 percent forever. Assume the stock currently sells for $49.10 per share. a. What is the dividend yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the expected capital gains yield? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)arrow_forward
- The Evanec Company s next expected dividend, D1, is $3.18; its growth rate is 6%; and its common stock now sells for $36.00. New stock (external equity) can be sold to net $32.40 per share. What is Evanec's cost of retained earnings, rs? What is Evanec's percentage flotation cost, F? What is Evanec's cost of new common stock, re?arrow_forwardA company just paid a dividend of € 1 per share. If the dividend is expected to increase at a steady rate of 10% per year, calculate the value of the company's share if the required return is 25%. O a. €6.67 O b. €11.25 O c. €5.22 O d. €7.33 O e. None of the given answers is correct.arrow_forwardBlue is currently selling for $26 per share. Its next dividend (in one year) is forecasted to be $1. Immediately after the dividend is paid, you expect the price to be $33. a. What is its expected dividend yield? b. What is its expected capital gain rate? c. What is the equity investors' expected return? Question content area bottom Part 1 a. Dividend yield: enter your response here%. (Round to two decimal places.) b. Capital gain rate: enter your response here%. (Round to two decimal places.) c. Expected Return: enter your response here%. (Round to two decimal places.)arrow_forward
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Dividend disocunt model (DDM); Author: Edspira;https://www.youtube.com/watch?v=TlH3_iOHX3s;License: Standard YouTube License, CC-BY