Dont use excel please DIRECTIONS: Compute the requirements of each problem. All computations must be handwritten. A. HYZEL Corporation, a domestic corporation, is expected to distribute P1.50 cash dividends at the end of the year. It is forecasted that the dividends will grow at a constant rate of 7% a year. The required rate of return of the common stock of HYZEL is 12.6%, Required: Using the constant growth stock valuation model, compute the current value per share where D1 = P1.50
Dont use excel please DIRECTIONS: Compute the requirements of each problem. All computations must be handwritten. A. HYZEL Corporation, a domestic corporation, is expected to distribute P1.50 cash dividends at the end of the year. It is forecasted that the dividends will grow at a constant rate of 7% a year. The required rate of return of the common stock of HYZEL is 12.6%, Required: Using the constant growth stock valuation model, compute the current value per share where D1 = P1.50
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 23P
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Dont use excel please
DIRECTIONS: Compute the requirements of each problem. All computations must be handwritten.
A. HYZEL Corporation, a domestic corporation, is expected to distribute P1.50 cash dividends at the end of the year. It is forecasted that the dividends will grow at a constant rate of 7% a year. The required rate of return of the common stock of HYZEL is 12.6%,
Required: Using the constant growth stock valuation model, compute the current value per share where D1 = P1.50
B. IZZY Company paid dividends to its common stockholders at P2.75 per share on December 31, 2018. The common stock of IZZY is selling in the market at P67.90 per share. The dividend growth rate of the company is 5.6% and the required rate of return of the common stock is 7.5%.
Required:
1. Using the discounted dividend model , how do you compute the market price of the common stock?
2. Will an investor consider buying the common stock of IZZY at 963.90 per share?
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