If the current dividend (DO) is $3.00 and the... If the current dividend (D) is $3.00...

Question

Question

business finance

Answer 1

Answer #1

Dividend at Time-5 would be:

$D5 = DO*(1 +9)$

$Ꭰ5 = 3 * {1+0.06)$

$D5=3* 1.3382255776$

$D5 = $4.015$

Hope this will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.

Answer 2

Similar Homework Help Questions

Your company paid a dividend of $3.00 last year (DO =3.0). The growth rate is expected...

Your company paid a dividend of $3.00 last year (DO =3.0). The growth rate is expected to be 10 percent for first year, 8 percent the second year, then 7 percent for the third year, and then the growth rate is expected to be a constant 6 percent thereafter. The required rate of return on equity (rs) is 10 percent. What is the company's current stock price (i.e., intrinsic value)? 0 $79.94 O $84.74 0 $73.32 O $67.47 $101.06
Your research on Shetland Co. stock shows the following information. Expected dividend (D1) = $3.00 Current...

Your research on Shetland Co. stock shows the following information. Expected dividend (D1) = $3.00 Current Price (PO) = $50.00 Constant Expected Growth Rate = 6.0% If the market is efficient and the stock is in equilibrium, which of the statements below is correct? Expected capital gains yield is equal to 5% Growth rate and expected dividend yield are equal Shetland Cols expected price in 10 years is equal to $100.00 Shetland Co.'s required return is equal to 10% Expected...
The Drogon Co. just issued a dividend of $2.46 per share on its common stock. The...

The Drogon Co. just issued a dividend of $2.46 per share on its common stock. The company is expected to maintain a constant 6 percent growth rate in its dividends indefinitely. If the stock sells for $30 a share, what is the company's cost of equity? Η Ο 14.69% Ο 8.89% Ο 14.2% Ο 13.96% Ο 15.43%

Problem 5 Stock Valuation - Discounted Dividend Model (10 points) Beyond Company's current dividend DO=$135The dividend...

Problem 5 Stock Valuation - Discounted Dividend Model (10 points) Beyond Company's current dividend DO=$135The dividend growth rate is expected to be h rate is expected to be 2% for 3 years, after which dividends are expected to grow at a rate of in dividends are expected to grow at a rate of 6% forever. If the firm's required return (rs) is 11%, what is its current stock price? (10 points)
Dixon Company just paid a dividend of $3.00 on its stock. The growth rate in dividends...

Dixon Company just paid a dividend of $3.00 on its stock. The growth rate in dividends is expected to be 30% from year 1 to year 5. The growth rate will then drop to -5% in years 6 and 7. It will then stabilize at 4% thereafter. Investors require a 15 % return on the stock for the first 5 years, 12% return for the next three years, and then 9% return thereafter. What is the current share price of...
Question 3 20 pts Stock XYZ has a current dividend of $3.00 The dividend is expected...

Question 3 20 pts Stock XYZ has a current dividend of $3.00 The dividend is expected to grow forever at a rate of 3.00% Based on the riskiness of XYZ, its discount rate is 4.00% With this information, what is the dividend yield from today to period 1? 3.30% 1.10% 3.00% 1.00%

A stock is expected to pay a dividend in 1 year of $3.00. Dividends are expected...

A stock is expected to pay a dividend in 1 year of $3.00. Dividends are expected to grow at a rate of 15% in year 2 and year 3, and then slow down to 4% per year in perpetuity thereafter. The required return is 18%. An analyst mistakenly uses the constant growth dividend discount model and assumes the perpetual growth rate will be 15% forever. By how much does he overestimate or underestimate the stock's actual value? A. Overestimates by...
Stock XYZ has a current dividend of $3.00 . The dividend is expected to grow forever...

Stock XYZ has a current dividend of $3.00 . The dividend is expected to grow forever at a rate of -1.00% . Based on the riskiness of XYZ, its discount rate is 4.00% With this information, what is the dividend yield from today to period 1? 5.00% -1.10% -1.00% 5.50%
please answer Question 4 20 pts Stock XYZ has a current dividend of $3.00 The dividend...

please answer Question 4 20 pts Stock XYZ has a current dividend of $3.00 The dividend is expected to grow forever at a rate of 3.00% Based on the riskiness of XYZ, its discount rate is 4.00% With this information, what is the dividend yield from today to period 1? O 3.00% O 1.00% 1.10% 0 3.30%

please answer Question 3 20 pts Stock XYZ has a current dividend of $3.00 The dividend...

please answer Question 3 20 pts Stock XYZ has a current dividend of $3.00 The dividend is expected to grow forever at a rate of 3.00% Based on the riskiness of XYZ, its discount rate is 4.00% With this information, what is the dividend yield from today to period 1? O 1.10% 1.00% O 3.00% O 3.30%