A stock expects to pay a dividend of $4.07 per share next year. The dividend is...

Question

Question

A stock expects to pay a dividend of $4.07 per share next year. The dividend is expected to grow at 25 percent per year for f

business finance

Answer 1

Answer #1

P10 = D11 / [ Ke - g ]

D11 = D1(1+g)^4*(1+g)^6

= 4.07 (1.25^4)(1.06^6)

= 4.07 (2.4414)(1.4185)

= 14.0952

P10 = D11 / [ Ke - g ]

= 14.0952 / [ 13% - 6%]

= 14.0952 / 7%

= 201.35

Answer 2

Similar Homework Help Questions

A stock expects to pay a dividend of $3.72 per share next year. The dividend is...

A stock expects to pay a dividend of $3.72 per share next year. The dividend is expected to grow at 25 percent per year for three years followed by a constant dividend growth rate of 4 percent per year in perpetuity. What is the expected stock price per share 5 years from today, if the required return is 12 percent?
A company expects to pay a dividend of $3.50 per share one year from today. The...

A company expects to pay a dividend of $3.50 per share one year from today. The dividend is expected to grow at 25 percent per year for two years. Thereafter, the dividend will grow at 4 percent per year in perpetuity. If the appropriate discount rate is equal to 12 percent, what is the price of the company's stock today?
Casino Inc. expects to pay a dividend of $4 per share at the end of year...

Casino Inc. expects to pay a dividend of $4 per share at the end of year 1 (Div1) and these dividends are expected to grow at a constant rate of 5 percent per year forever. If the required rate of return on the stock is 15 percent, what is the current value of the stock today?

1. Stewart Industries expects to pay a $3.00 per share dividend on its common stock at...

1. Stewart Industries expects to pay a $3.00 per share dividend on its common stock at the end of the year. The dividend is expected to grow 25 percent a year until t = 3, after which time the dividend is expected to grow at a constant rate of 5 percent a year. Stewart’s beta is 1.25, the market risk premium is 8% and the risk-free rate is 2.3%. What is the company’s current stock price? (Please use Excel to...
TMZ will pay a dividend next year of $2.84 per share on its stock. The dividends...

TMZ will pay a dividend next year of $2.84 per share on its stock. The dividends are expected to grow at a constant rate of 1.85 percent per year. If investors require a rate of return of 10.4 percent, what will be the stock price in Year 12?
A stock paid its annual dividend of $4.75 per share last week. This dividend is expected...

A stock paid its annual dividend of $4.75 per share last week. This dividend is expected to grow at 20 percent per year for two years. Thereafter, the dividend growth rate is expected to be constant at 5 percent per year indefinitely. If the appropriate discount rate for the stock is 12 percent, what should the stock's price be today?

A company just paid this year's dividend of $3.50 per share on its stock. The dividend...

A company just paid this year's dividend of $3.50 per share on its stock. The dividend is expected to grow at 28 percent per year for two years. Thereafter, the dividend will grow at 4.3 percent per year in perpetuity. If the appropriate discount rate is equal to 12 percent, what is the price of the company's stock today? A. $74 B. $61 C. $70 D. $67
A company is expected to pay a dividend of $1.06 per share one year from now...

A company is expected to pay a dividend of $1.06 per share one year from now and $1.66 in two years. You estimate the risk-free rate to be 3.3% per year and the expected market risk premium to be 5.6% per year. After year 2, you expect the dividend to grow thereafter at a constant rate of 4% per year. The beta of the stock is 1.3, and the current price to earnings ratio of the stock is 13. What...
Mack Industries is not expected to pay a dividend over the next four years. At the...

Mack Industries is not expected to pay a dividend over the next four years. At the end of the fifth year, the company anticipates that it will pay a dividend of $1.00 per share. This dividend is then expected to grow at a constant rate of 5% per year thereafter. The required rate of return on the company's stock is 1 1%. Compute the current price of the stock today 4)

QUESTION 11 Quixy Corp is expected to pay a dividend next year of $5.3 per share....

QUESTION 11 Quixy Corp is expected to pay a dividend next year of $5.3 per share. The dividend is expected to grow at a constant rate of 4% per year if Quixy Corp stock is selling for $59.37 per share, what is the stockholders' expected rate return? Submit your answer as a percentage and round to two decimal places (Ex 0.00%) QUESTION 12 Elicon Inc. preferred stock pays a constant annual dividend of $10.46 per share. If investors' required rate...