Question

8. Expected dividends as a basis for stock values The following graph shows the value of a stocks dividends over time. The sNote: Round each of the discounted values of the of dividends to the nearest tenth decimal place before plotting it on the gr

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Current Dividend = D0 = $ 1 and Perpetual growth rate = 3.5 %, Required Return = 10.4 %

Expected Dividends After Year 10 = D10 = 1 x (1.035)^(10) = $ 1.411 PV of D10 = 1.411 / (1.104)^(10) = $ 0.524

Expected Dividends After Year 20 = D20 = 1 x (1.035)^(20) = $ 1.989, PV of D20 = 1.989 / (1.104)^(20) = $ 0.275

Expected Dividends After Year 50 = D50 = 1 x (1.035)^(50) = 5.585, PV of D50 = 5.585 / (1.104)^(50) = $ 0.0397

Add a comment
Know the answer?
Add Answer to:
8. Expected dividends as a basis for stock values The following graph shows the value of...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • 8. Expected dividends as a basis for stock values The following graph shows the value of...

    8. Expected dividends as a basis for stock values The following graph shows the value of a stock's dividends over time. The stock's current dividend is $1.00, and dividends are expected to grow at a constant rate of 3.50% per year. The intrinsic value of a stock should equal the sum of the present value (PV) of all of the dividends that a stock is supposed to pay in the future, but many people find it difficult to imagine adding...

  • 2. Expected dividends as a basis for stock values The following graph shows the value of...

    2. Expected dividends as a basis for stock values The following graph shows the value of a stock's dividends over time. The stock's current dividend is $1.00 per share, and dividends are expected to grow at a constant rate of 3.50% per year. The intrinsic value of a stock should equal the sum of the present value (PV) of all of the dividends that a stock is supposed to pay in the future, but many people find it difficult to...

  • 4. Expected dividends as a basis for stock values The following graph shows the value of a stock's dividends over time....

    4. Expected dividends as a basis for stock values The following graph shows the value of a stock's dividends over time. The stock's current dividend is $1.00 per share, and dividends are expected to grow at a constant rate of 3.50% per year. The intrinsic value of a stock should equal the sum of the present value (PV) of all of the dividends that a stock is supposed to pay in the future, but many people find it difficult to...

  • 1. Expected dividends as a basis for stock values The following graph shows the value of...

    1. Expected dividends as a basis for stock values The following graph shows the value of a stock's dividends over time. The stock's current dividend is $1.00 per share, and dividends are expected to grow at a constant rate of 4.50% per year. The intrinsic value of a stock should equal the sum of the present value (PV) of all of the dividends that a stock is supposed to pay in the future, but many people find it difficult to...

  • 3. Expected dividends as a basis for stock values The following graph shows the value of a stock'...

    3. Expected dividends as a basis for stock values The following graph shows the value of a stock's dividends over time. The stock's current dividend is $1.00 per share, and dividends are expected to grow at a constant rate of 2.70% per year. The intrinsic value of a stock should equal the sum of the present value (PV) of all of the dividends that a stock is supposed to pay in the future, but many people find it difficult to...

  • 4. Expected dividends as a basis for stock values The following graph shows the value of a stock's dividends over time....

    4. Expected dividends as a basis for stock values The following graph shows the value of a stock's dividends over time. The stock's current dividend is $1.00 per share, and dividends are expected to grow at a constant rate of 4.50% per year. The intrinsic value of a stock should equal the sum of the present value (PV) of all of the dividendss that a stock is supposed to pay in the future, but many people find it difficult to...

  • 4. Expected dividends as a basis for stock values The following graph shows the value of...

    4. Expected dividends as a basis for stock values The following graph shows the value of a stock's dividends over time. The stock's current dividend is $1.00 per share, and dividends are expected to grow at a constant rate of 4.50% per year. The intrinsic value of a stock should equal the sum of the present value (PV) of all of the dividends that a stock is supposed to pay in the future, but many people find it difficult to...

  • 2. Expected dividends as a basis for stock values The following graph shows the value of...

    2. Expected dividends as a basis for stock values The following graph shows the value of a stock's dividends over time. The stock's current dividend is $1.00 per share, and dividends are expected to grow at a constant rate of 3.50% per year. The intrinsic value of a stock should equal the sum of the present value (PV) of all of the dividends that a stock is supposed to pay in the future, but many people find it difficult to...

  • 4. Expected dividends as a basis for stock values The following graph shows the value of...

    4. Expected dividends as a basis for stock values The following graph shows the value of a stock's dividends over time. The stock's current dividend is $1.00 per share, and dividends are expected to grow at a constant rate of 4.50% per year. The intrinsic value of a stock should equal the sum of the present value (PV) of all of the dividends that a stock is supposed to pay in the future, but many people find it difficult to...

  • 4. Expected dividends as a basis for stock values Аа А The following graph shows the...

    4. Expected dividends as a basis for stock values Аа А The following graph shows the value of a stock's dividends over time. The stock's current dividend is $1.00 per share, and dividends are expected to grow at a constant rate of 4.50% per year. The intrinsic value of a stock should equal the sum of the present value (PV) of all of the dividends that a stock is supposed to pay in the future, but many people find it...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT