Question

QUESTION 10

1. Solinux, Inc., is a young start-up company and will not pay dividends on its stock for the next 8 years, since the firm needs to plow back its earnings to fuel growth. The company will then pay a $1 per share dividend in year 9 and will increase the dividend by 3.4 percent per year thereafter. If investors require 7.3 percent return to invest in this stock, what is its current share price? (Do not include the dollar sign ($). Round your answer to 2 decimal places (e.g., 32.16).

4 points   

QUESTION 11

1. You've collected the following information from a financial web site.

   52-Week Price		Stock (Div)	Div Yld %	PE Ratio	Close Price	Net Chg
   Hi	Lo
   77.40	10.43	Palm Coal 0.36	2.6	6	13.90	–0.24
   56.56	34.17	Lake Lead Grp 2.29	5.6	10	41.18	–0.01
   130.93	69.50	SIR 2.00	2.2	10	88.97	3.07

   What was the highest dividend yield over the past year?  00.471.532.252.592.883.454.055.566.708.2310.43

   What was the lowest dividend yield over the past year?

Answer 1

(1)-Highest Dividend Yield

The 52-week Lowest stock price will be taken to find out the Highest Dividend Yield

Highest Dividend Yield = (Dividend per share / 52-week Lowest stock price) x 100

= [$2.29 / $34.17] x 100

= 6.70%

(2)-Lowest Dividend Yield

The 52-week highest stock price will be taken to find out the Lowest Dividend Yield

Lowest Dividend Yield = (Dividend per share / 52-week Highest stock price) x 100

= [$2.29 / $56.56] x 100

= 4.05%