Question

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 of return on this stock is 18 66%, what is the intrinsic value per share? Round your answer to two decimal places (Ex $0.00) QUESTION 13 The of any asset is equal to the present value of its expected future cash flows discounted at the investor's required rate of return Expected rate of return Growth rate Intrinsic value Market price QUESTION 14 Partzman Copaid a dividend of 54.36 on its common stock at the end of last year. The company's dividends are expected to grow at a constant rate of 5% indefinitely If the required rate of return on this stock is 9%, compute the current value per share of Partzman Costock Submit your answer in dollars and round to two decimal places (Ex 50.00) 5109 Click Save and Submit to save and submit. Click Save All Answers to save all answers

Answer 1

11. The following can be calculated using the Dividend Discount Model.

Rate of return of equity = Dividend to be paid next year/Current Stock Price + Growth Rate = 5.3/59.37 + 0.04 = 0.1293 =12.93%

12. Intrinsic Value per share = Preferred dividend/ Return on the stock = 10.46/18.66% = $56.06