IBM expects to pay a dividend of $8 next year and expects these dividends to grow at 4.17% a year. The price of IBM is $74 per share. What is IBM's cost of equity capital?

Q: What is the current value per share?

A: The current value per share means the price of share prevailing in the market. The discount rate is…

Q: Halliford Corporation expects ts earnings from that point onward. Each year, retained earnings will…

A:

Q: What must be the expected growth rate

A: The constant growth model is a method for valuing the share price of a stock. It calculates the…

Q: Laurel Enterprises expects this year's earnings to be $4.00 per share and has a 40% retention rate,…

A: In the given question we require to estimate firm's current stock price. We can calculate stock…

Q: 16 f

A: DIVIDEND NEXT YEAR = $2GROWTH RATE =7%STOCK PRICE = $100

Q: Chittenden Enterprises has 632 million shares outstanding. It expects earnings at the end of the…

A: Current share price can be calculated by using dividend discount model. In this model present value…

Q: A firm is expected to produce $50 million free cash flow next year. The WACC is 10% and the free…

A: Computation of stock (common share) price today:

Q: NoGrowth Corporation currently pays a dividend of $2.08 per​ year, and it will continue to pay this…

A: Cost of Equity: It is the cost of the company while raising finance by issuing equity. It is…

Q: IBM expects to pay a dividend of $6 next year and expects these dividends to grow at 3.92% a year.…

A: Cost of equity by dividend growth model: Cost of equity = D1/P0 + g D1 is expected dividend P0 is…

Q: Slow​ 'n Steady,​ Inc., has a stock price of $31​, will pay a dividend next year of $3.30​, and…

A: Required return = (Dividend next year / Stock price) + Growth rate where, Dividend next year = $3.30…

Q: Gillette Corporation will pay an annual dividend of Rs 0.65/ share one year from now. Analysts…

A: Annual Dividend one year from now is Rs 0.65/share Growth rate till 5th year is 12% Constant growth…

Q: Krell Industries has a share price of $22.32 today. If Krell is expected to pay a dividend of $1.07…

A: Current stock price (P0) = $22.32 Expected dividend (D1) = $1.07 Price after 1 years (P1) = $23.71

Q: Investors in IBM common stock expect the firm to pay a dividend next year of $1.79 per share.…

A: Next dividend (D1) = $1.79 Growth rate (g) = 6% Stock price (P0) = $76

Q: The earnings, dividends, and stock price of Shelby Inc. are expected to grow at 8% per year in the…

A: Cost of equity is the rate of return that an investor may expect from the amount which the investor…

Q: IBM expects to pay a dividend of $2 next year and expects these dividends to grow at 8% a year. The…

A: To Find: Cost of equity capital

Q: Summit Systems will pay an annual dividend of $1.59 this year. If you expect Summit's dividend to…

A: Gordon dividend growth model is used to value a stock who's dividends are expected to grwo at a…

Q: Suppose that MTA is expected to pay $4.00 in cash dividends next year at the rate of $1.00 per…

A: A model that helps to evaluate the value of the stock with the assumption that the dividend will…

Q: A company is projected to have a free cash flow of $243 million next year, growing at a 5.6% rate…

A: Current stock price is the value to stocks at which it can be sold in the market today.

Q: Summit Systems will pay a dividend of $1.48 this year. If you expect​ Summit's dividend to grow by…

A: Expected dividend (D1) = $1.48 Growth rate (g) = 5.3% Cost of capital (r) = 10.7%

Q: A mature manufacturing firm just paid a dividend of $588 but management expects to reduce the payout…

A: Introudction : Dividend = 5.88 Growth rate reduced = 4.32% required return = 8.46% as per the above…

Q: Sunland Inc.’s common shares currently sell for $35 each. The firm’s management believes that its…

A: Given information: Shares price (P) : $35 (As it is the market price) Dividend paid (D0): $2 Growth…

Q: A company is projected to have a free cash flow of $357 million next year, growing at a 4.4% rate…

A: Free cash flow in Year 1 (FCF1) = $357 million Free cash flow in Year 2 (FCF2) =$357*(1+4.4%)…

Q: Sunland Inc.’s common shares currently sell for $35 each. The firm’s management believes that its…

A: The cost of equity is the return an investor requires by investing in the equity shares of a…

Q: Chelsea Fashions is expected to pay an annual dividend of $0.80 a share next year. Themarket price…

A: Annual Dividend =0.80 Current stock price = 22.40 Growth rate =5%

Q: 13

A: ANNUAL DIVIDEND = 2$ GROWTH RATE = 7% PRICE = $95

Q: An analyst is trying to estimate the intrinsic value of VN Co. that has a weighted average cost of…

A: Let WACC = r = 10% FCF1 = P 3000 FCF2 = P 4000 FCF3 = P 5000 Growth rate after year 3 (g) = 6%

Q: Assume that IBM is expected to pay a total cash dividend of $5.60 next year and that dividends are…

A: The dividend discount model is where the price of a stock is calculated based on its future…

Q: NoGrowth Corporation currently pays a dividend of $2 per year, and it will continue to pay this…

A: Cost of equity: The cost of equity is the minimum rate of return that an investor expects while…

Q: Krell Industries has a share price of $22.53 today. If Krell is expected to pay a dividend of $0.92…

A: According to the values provided in the question: p0=$22.53d1=$0.92p1=$24.43

Q: Portage Bay Enterprises has $4 million in excess cash, no debt, and is expected to have free cash…

A: Data given:   Excess cash= $4 million Debt= nil Expected free cash flow next year = $ 14 million…

Q: a. Dividends would continue to stay at P10 per share. b. The value of equity

A: 1) Correct Answer = Option a= Dividends would continue to stay at P 10 per share.

Q: An analyst is trying to estimate the intrinsic value of Blue Co. that has a weighted average cost of…

A: Cost of Capital  = 10% Free Cash Flows: Year Free cash flow 1 3000 2 4000 3 5000…

Q: Gremlin Industries will pay a dividend of $1.65 per share this year. It is expected that this…

A: In the question, the value of the dividend to be paid, the growth rate and the stock price are…

Q: A mature manufacturing firm just paid a dividend of $422 but management expects to reduce the payout…

A: Current price on a stock with a dividend (D0) of $4.22 and required rate of return ( r ) of 9.1% can…

Q: Avril Synchronistics will pay a dividend of $1.50 per share this year. It is expected that this…

A: Computation of current value of share:Current value of share is $13.64.

Q: what is Krell’s dividend yield and equity cost of capital?

A: Information Provided: Current price = $22 Dividend = $0.88 Expected stock price = $23.54

Q: Eastern Electric currently pays a dividend of about $1.78 per share and sells for $27 a share. If…

A: We need to compute the growth rate in this question. We can solve this question using Dividend…

Q: IBM expects to pay a dividend of $4 next year and expects these dividends to grow at 7% a year. The…

A: Next year dividend = D1 = $4 Growth rate = g = 0.07 or 7% Price per share = P0 = $90 Cost of equity…

Q: Arts and crafts will pay a divided of $5 per share in 1 year. It sells at $50 a share, and firms in…

A: As per dividend discount model, Price of stock = Dividend at the end of year 1 /(expected return -…

Q: Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 30 percent for the next…

A: Current dividend = $ 2.65 Growth rate for 3 years = 30% Growth rate after 3 years = 4% Required…

Q: Spacefood Products will pay a dividend of $2.15 per share this year. It is expected that this…

A: Expected Divided (D1) = $2.15Cost of Equity (Ke) = 14%Growth Rate (g) = 6% Calculation of Current…

Q: An all-equity firm had a dividend expense of $45,000 last year.  The market value of the firmis…

A: Market value today, V is associted with the total expected dividend expense D1 via the following…

Q: NoGrowth Corporation currently pays a dividend of $2.24 per​ year, and it will continue to pay this…

A: Price per share is present value of dividends

Q: Opera PLC has just paid an annual dividend of $0.84 and it is predicted to have an annual growth of…

A: Share prices present value of the future cash flows from that stock. Following is the formula of the…

Q: Anle Corporation has a current price of $13​, is expected to pay a dividend of $2 in one​ year, and…

A: Answer: 1. Calculation of Anle's expected dividend yield: Formula, Expected dividend yield =…

Q: Krell Industries has a share price of $22.79 today. If Krell is expected to pay a dividend of 1.19%…

A: Current stock price = $22.79 Dividend rate = 1.19% Growth rate = 23.33%

Q: XY is a new firm in a rapidly growing industry. The company is planning on increasing its annual…

A: We need to use dividend discount model to calculate price of stock. Stock price =present value of…

Q: Summit Systems will pay a dividend of $1.50 this year. If you expect Summit’s dividend to grow by 6%…

A: The below expression can be used to calculate price per share: