BMW just paid an annual dividend of 2 per share. Management has promised shareholders to increase dividends at a constant rate of 10%. If the required return is 15%, what is the current price per share?
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BMW just paid an annual dividend of 2 per share. Management has promised shareholders to increase dividends at a constant rate of 10%. If the required return is 15%, what is the current price per share?
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- Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1 and by 5% in Year 2. Its operating profitability ratio (OP) is 10%, and its capital requirement ratio (CR) is 80%? What are the projected sales in Years 1 and 2? What are the projected amounts of net operating profit after taxes (NOPAT) for Years 1 and 2? What are the projected amounts of total net operating capital (OpCap) for Years 1 and 2? What is the projected FCF for Year 2?Antiques "R" Us is a mature manufacturing firm. The company just paid a dividend of $11.30, but management expects to reduce the payout by 4.5 percent per year, indefinetely. If you require a return of 9 percent on this stock, what will you pay for a share today?McDonald's just paid an annual dividend of 0.5 per share. Management has promised shareholders to increase dividends at a constant rate of 3%. If the required return is 5%, what is the current price per share?
- crane Inc. common chairs currently sell for $30 each. The firms management believes that it's share should really sell for $54 each. If the firm just paid an annual dividend of two dollars per share and management expects those dividends to increase by 8% per year forever, and the common knowledge to the market. What is the current cost of common equity for the firm?Nu-Tek, Inc. is expecting a period of intense growth so have decided to retain more of their earnings to help finance that growth. As a result they are going to reduce their annual dividend by 10 percent a year for the next three years. After that they will maintain a constant dividend of $.70 a share. Last year, the company paid $1.80 per share. What is the market value of this stock if the required rate of return is 13 percent?Arts and crafts will pay a divided of $5 per share in 1 year. It sells at $50 a share, and firms in the same industry provide an expected rate of return of 15%. What must be the expected growth rate of the company's dividends?
- IBM expects to pay a dividend of $6 next year and expects these dividends to grow at 3.92% a year. The price of IBM is $75 per share. What is IBM's cost of equity capital?The Whirlwind Co. just paid an annual dividend of $3 a share. The firm expects to pay dividends forever and to increase the dividend by 5 percent annually. What is the current value of this stock if the required return is 9 percent? (show work)The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 20 percent next year and then decreasing the growth rate to a constant 5 percent per year. The company just paid its annual dividend in the amount of $1 per share. What is the current value of a share if the required rate of return is 14 percent? a. 13.28 b. 13.42 c. 13.33 d. 13.19 e. 13.24
- VioletRichGold Company has been growing at a rate of 6 percent for the past two years, and the company’s CEO expects the company to continue to grow at this rate for the next several years. The company paid a dividend of RM1.20 last year. If your required rate of return was 14 percent, what is the maximum price that you would be willing to pay for this company’s stock?You are told by your investment advisor that Laduma Co. is expected to earn R5 per share next year, R6 per share the following year and that thereafter earnings are expected to grow by 8 percent per year. The dividend payout ratio is 60 percent and the required rate of return on Laduma shares is 15 percent. If the current share price is R40, would you expect your adviser to make a buy, hold or sell recommendation? If transaction costs are R2,50 per share, would you follow his advice? required: D(1) = D (3) = P(T) = P(0) = Buy/sell: Net Procceed: Buy/sell: