MENSA Int'l just paid a dividend of $1.25. Their growth rate in dividends is 10% and you require a rate of return of 10%, what is the value of this stock today?
Value of this stock today = D0(1 + g) / (r - g)
Value of this stock today = $1.25(1.10) / (0.10 - 0.10)
Value of this stock today = $1.375 / 0
Value of this stock today = $0
MENSA Int'l just paid a dividend of $1.25. Their growth rate in dividends is 10% and...
Thirsty Cactus Corp. just paid a dividend of $1.25 per share. The dividends are expected to grow at 35 percent for the next 7 years and then level off to a 8 percent growth rate indefinitely. Required : If the required return is 13 percent, what is the price of the stock today?
The Company’s beta is 1.25 and its dividend growth rate is 14.75%, just yesterday, it paid a dividend of $1.75. Today’s share price is $53.00. Furthermore, you believe that the share price moves in accordance with the dividend constant growth model. The economy wide risk free interest rate is 4.5% and the expected risk premium for the market portfolio is 9.5%. You believe that the stock represents a good investment if the expected total return implied by the dividend constant growth model exceeds the...
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...
Rasheed Farm just paid a dividend of $2.65 on its stock. The growth rate in dividends is expected to be a constant 4.5 percent per year indefinitely. Investors require a return of 15 percent for the first three years, a return of 13 percent for the next three years and a return of 11 percent thereafter. What is the current share price?
James Co. just paid a dividend of $3.00 on its stock. The growth rate in dividends is expected to be 30% in the up period, which lasts from year 1 to year 5. The growth rate will then drop to -5% in the down period that lasts from year 6 to year 7. It will then stabilize at 4% thereafter. Investors in James Co. require a 15 percent return on the stock for the first five years, a 12 percent...
Dolemite mines just paid a dividend of $2.00, its dividends are expected to grow at 5.00% forever. Investors required return on the stock is 13.00%. What is Dolemite's dividends for the next three years? Dividends Dividend in Year 1 Dividend in Year 2 If you were going to buy the stock today and sell it next year, at what price would you expect to sell the stock for, assuming the growth rate and required return remains unchanged? Stock Price in...
The last dividend paid by Coppard Inc. was $1.25. The dividend growth rate is expected to be constant at 42.5% for 3 years, after which 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?
Jimmy Co. just paid a dividend of $3.00 on its stock. The growth rate in dividends is expected to be 30% in the up period, which lasts from year 1 to year 5. The growth rate will then drop to -5% in the down period that lasts from year 6 to year 7. It will then stabilize at 4% thereafter. Jimmy Co. investors require a 15 percent return on the stock for the first five years, a 12 percent return...
Stock Valuation Bretton, Inc., just paid a dividend of $3.15 on its stock. The growth rate in dividends is expected to be a constant 4 percent per year, indefinitely. Investors require a 15 percent return on the stock for the first three years, a 13 percent return for the next three years, and then an 11 percent return thereafter. What is the current share price for the stock?
Iota incorporated is in a declining industry. it just paid a dividend of $7.50, and dividends are expected to decrease by 8% per year, indefinitely. If you require a return of 10% on this stock, what will you pay for a share today?