Homework #5B (Value of Common Stock Expected Rate of return on Common Stock) (002)

Problem 9.6 Nynet, Inc., paid a dividend of $4.40 last year. The company's management does not expect to increase its dividend in the foreseeable future. If the required rate of return is 19.0 percent, what is the current value of the stock? (Round answer to 2 decimal places, e.g. 15.25.) Current value Click if you would like to Show Work for this question: Open Show Work

Wish You Were Here, Inc, currently does not pay a dividend but is expected to pay its first annual dividend of $4.90 per share exactly 7 years from today. After that, the dividends will grow at 3.5 percent forever. If the required return is 11.3 percent, what is the price of the stock today?   a. $51.10   b. $62.82   c. $29.69   d. $33.05

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question 3

Q8

QUESTION 1 A company has stock that just paid a $2.9 per share dividend. The dividend is expected to grow at 17% over the next year and then grow at a constant 3% per year forever. If the stock's required return is 10%, how much should you be willing to pay for a share of the stock? Round your final answer to two decimal places (don't round intermediate calculations).

What comes closest to the value today of a stock that just paid a dividend of $1 and expects to grow that dividend by 10% per year in year 1 and year 2, and then grow each dividend beginning in year 3 by 2% forever if the required rate of return is 5%? A. $39.46 B. $38.25 C. $38.03 D. $37.66 E. $37.08

Question 3. Consider the current price of a stock is $65.88. If dividends are expected to be $1 per share pays annually for the next five years, and the required return is 10%. (1) What should the price of the stock be in five years when you plan to sell? (2) If the dividend and required return remain the same, and the stock price is expected to increase by $1 five years from now, does the current stock price also increase by $1? Why or why not?

Question 8: The last dividend paid by ABC company is 5 TL. The dividend is expected to grow by 4% next year, 6% in the second year, % 3 third year and 2% in the following years. If the expected return rate of investors (k) is 10%. What is the value of this stock today (P0)?

Please answer to question (b) is needed

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which one is correct? QUESTION 11 Exhibit 1.7 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)   You purchased 100 shares of GE common stock on January 1, for $29 a share. A year later you received $1.25 in dividends per share and you sold it for $28 a share.   Refer to Exhibit 1.7. Calculate your holding period return (HPR) for this investment in GE stock.   a. 0.9655   b. 1.0973   c. 1.0804   d. 1.0086   e. 1.0357

Assist with this question part a and b A year ago, you purchase 300 shares of IXC Technologies, Inc .stock at a price of $9.00 per share.The stock paid an annual dividend of $0.27 per share. Today, you sold all your shares for $ 16.20 per share. a) What is your total dollar return on this investment? b) Calculate dividend yield, capital yield and total rate of return for the year.

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Question 13)   Shook Fitness pays an annual dividend that increases by 3.4 percent per year, commands a market rate of return of 14.2 percent, and sells for$11.92per share. What is the expected amount of the next dividend?   $1.69   $2.29   $1.29   $2.32   $4.17   2)How much are you willing to pay for one share of Govender stock if the company just paid an annual dividend of$1.61, the dividends increase by 4.2 percent annually, and you require a return of 16.4 percent?   $13.7$15.36$10.23$13.20$9.82

Question 4: The last dividend paid by ABC company is 5 TL. The dividend is expected to grow next years by 49%, 6%, 3% 4% and 2% in the following years. If the expected return rate of investors (k) is 10%. a) what is the value of this stock today (PO)? b) What will the stock price be 10 years from today?

Question 1 The firm is expected to pay a dividend of $0.50 forever starting from the third year. If the required return is 10 percent, what is this stock worth today? O4.13 3.42 O 3.76