ABC Corp. has just paid a quarterly dividend of $0.28. ABC's dividends will grow by 5% for the next 4 quarters, and then grow by 0.4% thereafter. ABC has a quarterly required return of 4%. Attempt 3/10 for 8 pts. Part 1 What is the value of the stock?
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ABC Corp. has just paid a quarterly dividend of $0.28. ABC's dividends will grow by 5% for the next 4 quarters, and then grow by 0.4% thereafter. ABC has a quarterly required return of 4%.
Part 1
What is the value of the stock?
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- Consider a stock that will have dividend growth rates in the next three periods of 13%, 9%, and 4%, respectively. The third growth rate remains forever. The company just paid a dividend, D0, of $1.285. The interest rate is 12%. How much are the dividends in periods 1, 2, and 3? Enter your answers rounded to 2 DECIMAL PLACES. D1 = 1.45 Correct response: 1.45\ pm 0.01 D2 = 1.58 Correct response: 1.58\pm 0.01 D 3 = 1.65 Correct response: 1.64\pm 0.01 Click "Verify" to proceed to the next part of the question. Using 1.64 as the dividend in period 3, what is the price of the stock at time 2? Enter your response below rounded to 2 DECIMAL PLACES. Number Click "Verify" to proceed to the next part of the question.Suppose Lilly V, Inc. has just paid a dividend. The next dividend, to be paid in a year, is forecasted to be $4. If the growth rate of dividends is 7% and the discount rate is 11%, at what price will the stock sell? a.Less than $100 b.More than $100 c.$100 d.$111ABC Company is expected to pay $2.80 per share dividend at the end of the year (D1 = $2.80). The dividend is expected to grow at a constant rate of 5% per year. The required rate of return on the stock, rs is 9%. What is the stock’s current value per share? 2. Use the information from question 2 to calculate the following. You will need to also calculate the current stock price for year 2 in order to calculate each of these items. (hint: Use PowerPoint slide 14 as a guide): Dividend yield Capital gains yield Total return 3. ABC Company also has perpetual preferred stock outstanding that sells for $25 a share and pays a dividend of $3.00 at the end of each year. What is the required rate of return?
- 'S A company will pay a $2 per share dividend in 1 year. The dividend in 2 years will be $4 per share, and it is expected that dividends will grow at 5% per year thereafter. The expected rate of return on the stock is 14%. a. What is the current price of the stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Current price b. What is the expected price of the stock in a year? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Expected price1. An analyst estimates that a stock will pay a $1 dividend next year and that it will sell for $40 at year-end. If the required rate of return is 14%, what is the value of the stock? A. $34.60. B. $35.52. C. $35.96.Suppose Barclay Corp is expected to pay a dividend of $2.50 at the end of the year. f the company and its dividends are growing at a relatively constant rate of 3.5% and Investors required return on the stock is 10.2%, what is the value of the stock? O$37.31 O $24.47 O$25.37 O $24.51 O$38.62 Page 13 of 30 Previous Page Next Page 0gf30.guestions.saved.
- 1. An analyst estimates that a stock will pay a $1 dividend next year and that it will sell for $40 at year-end. If the required rate of return is 14%, what is the value of the stock? A. $34.60. B. $35.52. C. $35.96. Please provide an accurte answer.> Question 8 ABC,. Inc just paid a dividend of $36.98. The dividends are expected to grow by 22% in Years 1-3. After that, the dividends are expected to grow by 1% each year. If the required rate of return is 18%, what is today's price of the stock? Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box.CanPro Co. is expecting that its dividend for this coming year will be $1.2 a share and that all future dividends are expected to increase by 3 percent annually. What is the required return of this stock if the current market price of the stock is $17? a. 11.00% b. 9.67% c. 11.74% d. 10.06%
- ABC justpaid a dividend of D0 = $4. Analysts expect the company’s dividend to grow by33% this year, by 28% in Year 2, and at a constant rate of 6% in Year 3 andthereafter. The required return on this stock is 17%. What is the best estimateof the stock’s current market value?Note: Enter your answer rounded off to two decimal points.Do not enter $ or comma in the answer box. For example, if your answer is$12.345 then enter as 12.35 in the answer box.4. Tannery Worldwide's common stock is currently selling for $48 a share. If the expected dividend at the end of the year is $2.40 and last year's dividend was $2.00, what is the rate of return implicit in the current stock price?Assume a stock paid a dividend of $1 per share over the last year, the required rate of return on the stock is 5%, and the dividends are expected to grow at a constant rate of 11% into the future. What is the intrisic value of this stock? A. $16.67 B. $17.50 C. $9.55 D. Cannot determine without additional information
