Earthly Foods just paid its annual dividend of $1.45 a share. The firm recently announced that all future dividends will be increased by 2.8% each year forever. What is the fair price of the stock if an investor requires a 14% rate of return? Group of answer choices $12.95 $13.31 $13.68 $14.07
Want to see the full answer?
Check out a sample Q&A here
Related Finance Q&A
Find answers to questions asked by students like you.
Q: Earthly Foods just paid its annual dividend of $1.45 a share. The firm recently announced that all…
A: Current dividend = $1.45 Expected dividend = Current dividend *(1+ Growth rate) Expected dividend =…
Q: Healthy Foods just paid its annual dividend of $1.62 a share. The firm recently announced that all…
A: Dividend discount model is a security valuation method which is used to forecast or predict the…
Q: Cuban Corporation will pay a dividend of $3.06 per share next year. The company pledges to increase…
A: Using Gordon Growth Model, we can determine the price of the stock today. The constant growth model…
Q: Sandhill Tire Co. just paid an annual dividend of $1.20 on its common shares. If Sandhill is…
A: Under dividend growth model, valuation of common stock is done by assuming that dividends keep…
Q: Lightscape FX, an exterior landscape lighting company, paid an annual dividend of R1,42 a share last…
A: Here, Last Dividend Paid is R1.42 Dividend in Year 1 is R1.50 Dividend in Year 2 is R1.75 Dividend…
Q: Hudson Corporation will pay a dividend of $3.02 per share next year. The company pledges to increase…
A: Using Dividend Discount Model
Q: Hudson Corporation will pay a dividend of $2.70 per share next year. The company pledges to increase…
A: Stock Price is computed by adding discounted value of future benefits that investor will receive by…
Q: Whitewall Tire Co. just paid an annual dividend of $1.60 on its common shares. If Whitewall is…
A: Formulas: Cost of common stock = (Expected dividend / Price) + Growth rate
Q: A firm paid an annual dividend of $1.37 a share last month. Today, the company announced that future…
A: In this question we required to compute the price we are willing to pay for one share of stock today…
Q: Sessler Manufacturers made two announcements concerning its common stock today. First, the company…
A: Dividend paid next year then D1= 1.75 Growth rate = 1.5% Required return =14%
Q: HQZ Inc., has just paid a dividend of $4.9 per share and has announced that it will increase the…
A: INTRODUCTION: Current Divident = 4.90 Each year increase by = 2.36 Discount rate = 9.43% Current…
Q: HQZ Inc., has just paid a dividend of $4.49 per share and has announced that it will increase the…
A: Present value of all the dividends paid for next 4 years is the price expected to be paid. Dividends…
Q: Bates, Inc. pays a dividend of $1 and is currently selling for $32.50. If investors require a 12…
A: We need to compute the growth rate in the given question. We can compute the growth rate using…
Q: Mclver's Meals, Inc. currently pays a OMR2 annual dividend. Investors believe that dividends will…
A: Excel workings:
Q: Hubbard Industries just paid a common dividend, D0, of $1.30. It expects to grow at a constant rate…
A: The dividend discount model is used as a means to determine the value of a share based on the sum of…
Q: Oman Group just paid an annual dividend of OMR 2.45 a share. The firm plans to increase the annual…
A: Therefore, the price of the stock is OMR 34.27.
Q: Magic Company pays a $2.10 annual cash dividend (D0) and it plans to keep the dividend at $2,10 for…
A: Dividend Discount Model refers to a model which is being used in order to predict or find out the…
Q: Babbalu Inc. just paid a dividend of $1 per share. Babbalu expects to increase its annual dividend…
A: Given that the dividend just paid is $1.The dividend growth is expected to be 20% per year for next…
Q: CEPS Group just paid an annual dividend of OMR 5.25 a share. The firm plans to increase the annual…
A: The share price is the current market price of the share. It is the price of the share at any…
Q: CEPS Group just paid an annual dividend of OMR 5.25 a share. The firm plans to increase the annual…
A: Click to see the answer
Q: Blue Co. just paid a P2 per share dividend on its common stock. The dividend is expected to grow at…
A: Solution : Given Dividend paid (D0) =P2 Growth rate =7% Current…
Q: Corn, Inc., has an odd dividend policy. The company has just paid a dividend of $6 per share and has…
A: Dividend this year D0 was = $6 Dividend in year 1, D1 = $6 + $2 = $8 Dividend in year 2, D2 = $8 +…
Q: Blossom Corp. paid a dividend of $2.00 yesterday. The company’s dividend is expected to grow at a…
A: As per dividend discount model, P0 = D1 /(ke -g) Where, P0 = market price D1 =D0*(1+g) i.e.…
Q: Balloons Inc normally pays a quarterly dividend. The last such dividend paid was $1.00, all future…
A: The question is based on the concept of valuation of stock by use of discounting of expected future…
Q: The Impulse Shopper recently paid an annual dividend of $1.13 per share. The company just announced…
A: In this, we have to calculate dividends and from that, we have to calculate the present value of the…
Q: DEF Company's current share price is $17 and it is expected to pay a $1.55 dividend per share next…
A: Cost of equity can be computed by the following formula, Re = (D1 / P0) + g Where, D1 = Dividends…
Q: Hudson Corporation will pay a dividend of $2.58 per share next year. The company pledges to increase…
A: Formulas: Current price = Expected dividend / (Required return - growth rate)
Q: Jarett & Sons's common stock currently trades at $32.00 a share. It is expected to pay an annual…
A: a. Cost of equity = (D1/share price)+ Dividend growth rate Cost of equity = ($1/$32) + 6% Cost of…
Q: Yesterday, Tobermory plc paid a £2 per share dividend. Its dividends are expected to grow steadily…
A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…
Q: A. Torch Industries can issue perpetual preferred stock at a price of $55.00 a share. The stock…
A: A combination of the long-term debts and different types of stocks to raise funds for the business…
Q: RST Ltd. Is currently selling common stock for $90 par share. The firm expects to pay cash dividend…
A: Cost of common stock refers to minimum returns required to pay to its shareholders. In other words,…
Q: Eakins Inc.'s common stock currently sells for $55.00 per share, the company expects to earn $2.75…
A: First, dividend will be computed as follows: Payout ratio * Earning per share…
Q: Fowler, Inc., just paid a dividend of $2.70 per share on its stock. The dividends are expected to…
A: As per Dividend Growth model, P0 = D1 / (ke-g) Where, D1 = Dividend for year 1 Ke = cost of equity…
Q: Coolibah Holdings is expected to pay dividends of $1.00 every six months for the next three years.…
A: Current Price = Present Value of Dividend + Present Value of price at the end of period
Q: Hudson Corporation will pay a dividend of $2.54 per share next year. The company pledges to increase…
A: Definition: Dividends: This is the amount of cash distributed to stockholders by a company out its…
Q: In response to the stock market's reaction to its dividend policy, the Nico's Toy Company has…
A: Current dividend=$3.25Growth rate=4%Required rate of interest=9%
Q: CEPS Group just paid an annual dividend of OMR 2.45 a share. The firm plans to increase the annual…
A: Formulas:
Q: CEPS Group just paid an annual dividend of OMR 2.45 a share. The firm plans to increase the annual…
A: Dividend paid just now (D0) = OMR 2.45 Dividend in Year 1 (D1) = OMR 2.45*(1+4%) = OMR 2.548…
Q: CEPS Group just paid an annual dividend of OMR 2.45 a share. The firm plans to increase the annual…
A: Formulas:
Q: CEPS Group just paid an annual dividend of OMR 1.45 per share. Today, the company announced that…
A: Formula: Current price = Expected dividend / ( Required return - growth rate)
Q: CEPS Group just paid an annual dividend of OMR 1.45 per share. Today, the company announced that…
A: Here, The current price of the stock is P0. The last dividend paid is D0. The required rate of…
Q: Coolibah Holdings is expected to pay dividends of $1.30 every six months for the next three years.…
A: A stock is a financial security issued by corporations to raise equity capital for a long-term…
Q: Java Coffee is preparing to pay its fırst dividend. It is going to pay $1, $1.5, and $1.75 a share…
A: Share worth = Dividend1 / ( 1 + Rate )1 + Dividend2 / ( 1 + Rate )2 + Dividend3 / ( 1 + Rate )3 +…
Q: Jarett & Sons's common stock currently trades at $33.00 a share. It is expected to pay an annual…
A: Given, P0 = $33 D1 =$1.25 g =5%
Q: The Stopperside Wardrobe Co. just paid a dividend of $1.45 per share on its stock. The dividends are…
A: Under dividend growth model, valuation of common stock is done by assuming that dividends keep…
Q: The Stopperside Wardrobe Co. just paid a dividend of $1.45 per share on its stock. The dividends are…
A: Given: Current dividend = $1.45 Growth rate = 6% Required return = 11%
Q: XYZ stock is currently selling for $89.78 per share. The company just paid its first annual dividend…
A: Given information: Market price of stock is $89.78 First dividend paid is $1.86, Dividend growth…
Q: Milford Masonry, Inc. expects to pay a dividend per share of $2.50 next year on its common stock.…
A: solution given Annual dividend expected $2.50 per share Required rate of return 10%…
Q: Carlysle Corporation has perpetual preferred stock outstanding that pays a constant annual dividend…
A: In the given question we need to compute the price of firm's perpetual preferred stock. Perpetual…
Q: EMKA corporation is going to pay a dividend of $1.5, $2, and $2.5 each year for the next three…
A: Here, Dividend in Year 1 is $1.5 Dividend in Year 2 is $2 Dividend in Year 3 is $2.5 Constant Growth…
