Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Investors require a 17%
A. What is its value if the previous dividend was D0 = $1.75 and investors expect dividends to grow at a constant annual rate of (1) -6%, (2) 0%, (3) 3%, or (4) 12%? Do not round intermediate calculations. Round your answers to two decimal places.
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- Suppose you know that a company's stock currently sells for $66.60 per share and the required return on the stock is 11 percent. You also know that the total return on the stock is evenly divided between capital gains yield and dividend yield. If It's the company's policy to always maintain a constant growth rate In its dividends, what is the current dividend per share? Note: Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Dividend per sharearrow_forwardEcolap Inc. (ECL) recently paid a $0.34 dividend. The dividend is expected to grow at a 12.50 percent rate. The current stock price is $42.52. What is the return shareholders are expecting? (Do not round intermediate calculations. Round your answer to 2 decimal places.)arrow_forwardA firm's target dividend is $4.40 and the prior-period dividend is $2.75. What is the change in dividends if the adjustment coefficient (B) is equal to 1? O $-3.30 O $3.30 00 O $1.65arrow_forward
- A3) see picturearrow_forwardSolve it using formulas, no tables correct anwer is P= £301.47arrow_forwardInvestors require an 8% rate of return on Mather Company's stock (l.e., rs = 8%). a. What is its value if the previous dividend was Do = $3.00 and Investors expect dividends to grow at a constant annual rate of (1) -6%, (2) 0%, (3) 3 %, or (4) 5%? Do not round intermediate calculations. Round your answers to the nearest cent. (1) $ (2) $ (3) $ (4) $ 20.14 37.50 61.80 b. Using data from part a, what would the Gordon (constant growth) model value be if the required rate of return was 8% and the expected growth rate was (1) 8% or (2) 12%? Round your answers to the nearest cent. If the value is undefined, enter N/A. (1) $ (2) $arrow_forward
- Avondale Aeronautics has perpetual preferred stock outstanding with a par value of $100. The stock pays a quarterly dividend of $3.00 and its current price is $84. What is its nominal annual rate of return? Do not round intermediate calculations. Round your answer to two decimal places. ? % What is its effective annual rate of return? Do not round intermediate calculations. Round your answer to two decimal places. ? %arrow_forwardBaghibenarrow_forwardeBook Investors require a 7% rate of return on Levine Company's stock (i.e., rs = 7%). What is its value if the previous dividend was D0 = $3.75 and investors expect dividends to grow at a constant annual rate of (1) -5%, (2) 0%, (3) 2%, or (4) 6%? Do not round intermediate calculations. Round your answers to the nearest cent. (1) $ (2) $ (3) $arrow_forward
- 4) see picarrow_forward7) see picturearrow_forwardThe Evanec Company's next expected dividend, D1, is $2.69; its growth rate is 7%; and its common stock now sells for $35.00. New stock (external equity) can be sold to net $31.50 per share. What is Evanec's cost of retained earnings, rs? Do not round intermediate calculations. Round your answer to two decimal places. rs = % What is Evanec's percentage flotation cost, F? Round your answer to two decimal places. F = % What is Evanec's cost of new common stock, re? Do not round intermediate calculations. Round your answer to two decimal places. re = %arrow_forward
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