Paramount Company's stock is expected to generate a dividend and terminal value one year from now of P57.00. The stock has a beta of 1.3, the risk-free interest rate is 6 percent, and the expected return market return is 11 percent. What should the equilibrium price of Investors' stock in the market now? a.  P53.77 b.  P41.22 c.  P50.67 d.  P43.85

Q: A common stock has expected year-end dividend is D1 = ₱1.60, its required return is rs = 11.00%, its…

A: growth rate = expected return - dividend yield = 11 - 6 = 5%   dividend yield = dividend/price price…

Q: A stock is trading at $80 per share. The stock is expected to have a year-end dividend of $4 per…

A: Formula for current price of the stock is: Current price = Expected dividend / (required return -…

Q: A share of stock with a beta of .75 now sells for $50. The investors expect the stock to pay a…

A: Beta = 0.75 P0= $50 D1 = $2 Rf = 4% RM = 7% Where, D = Expected Dividend Po = Current Price Rf =…

Q: Investors believe that a certain stock will pay a $4 dividend next year. The market price of the…

A: We require to calculate the long run growth rate in dividends from the following details given in…

Q: A firm's stock has a required return of 9.00%. The stock's dividend yield (using the dividend to be…

A: A dividend is a return received by an investor from an investment made in the company. In the case…

Q: A share of stock with a beta of 0.75 now sells for $50. Investors expect the stock to pay a year-end…

A: Expected Return = Risk free rate + Market risk premium * Beta

Q: Cartwright Brothers' stock is currently selling for $40 a share. The stock is expected to pay a $2…

A: The first step would require the calculation of cost of equity as per the dividend discount model.…

Q: You are considering an investment in Crisp Cookware’s common stock. The stock is expected to pay a…

A: As per CAPM Ri = Rf + B (Rm - Rf) Where Ri = Return on equity Rf = Risk free rate of return B =…

Q: A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return…

A: The Dividend Growth Model refers to a model that helps in calculating the intrinsic value of a stock…

Q: A stock is expected to pay a dividend of $1.65 at the end of the year. The required rate of return…

A: Expected dividend (D1) = $ 1.65 Required return (rs) = 9.32% Growth rate (g) = 7.2%

Q: A stock is expected to pay a dividend of $0.75 at the end of the year (i.e., D1 = $0.75), and it…

A: Pricen = Dividendn+1 / ( Required rate - Growth rate )

Q: A stock is trading at $80 per share. The stock is expected to have a year-end dividend of $4 per…

A: The growth rate can be referred to as the return expected by the investors from an investment…

Q: The current dividend, D0, of the stock of Sun Devil Corporation is $3 per share. Under present…

A: As per the given information: Current dividend - $3 per shareGrowth rate - 4 percent annuallyBeta -…

Q: Preferred products has issued preferred stock with an annual dividend of $7.00 that will be paid in…

A: annual dividend = 7 Time = perpetuity Discount rate = 10%   Assuming face value to be =100

Q: A stock is trading at $80 per share. The stock is expected to have a year-end dividend of $4 per…

A: The dividend discount model is the model of stock valuation that assumes that the stock price of a…

Q: XYZ common stock is expected to pay a dividend of $2.58 next year, and that dividend grows at a…

A: In this question we require to compute the expected rate of return (re) of stock from below details:…

Q: You are considering an investment in the common stock of Crisp's Cookware. The stock is expected to…

A: A stock is a financial security issued by a corporation to raise equity funds for the long-term…

Q: A stock is expected to pay a dividend of $1.27 at the end of the year. The required rate of return…

A: Formula: Current stock price = Expected dividend / (Required return - Growth rate)

Q: Woidtke Manufacturing’s stock currently sells for $22 a share. The stockjust paid a dividend of…

A: Computation:

Q: Analysts expect Exxon Mobil stock to pay a dividend of $3.43 in 1 year and is expected to sell for…

A: Expected dividend of Stock in year 1(D1) = $3.43 Expected Selling Price of Stock in year 1(P1) =…

Q: A stock is expected to pay a dividend of $1.67 at the end of the year. The required rate of return…

A: A stock is expected to pay a dividend of D1 = $1.67 at the end of the year. The required rate of…

Q: A share of stock with a beta of 0.77 now sells for $52. Investors expect the stock to pay a year-end…

A: Beta = 0.77 Risk free Rate = 4% Market Risk Premium = 7% Expected Return = risk free rate + beta *…

Q: A stock is currently selling for $92.45 and is expected to sell for $109.07 in 1 year.  If the…

A: The overall return on an asset or investment portfolio over the time it has been kept is known as…

Q: A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return…

A: The Dividend Growth Model refers to a model that helps in calculating the intrinsic value of a stock…

Q: stock is expected to pay a dividend of $1.50 at the end of the year (i.e., D1 = $1.50), and it…

A: In this we have to use dividend discount model to calculate the price of stock.

Q: LotsaDough's common stock is expected to pay a dividend of $1.20 next year, with a forecasted…

A: Next year dividend (D1) = $1.20 Growth rate (g) = 0.07 Stock price (P0) = $12.50 Cost of common…

Q: Blast! stock has a beta of 1.4 and is currently selling for $16. Your DCF analysis indicates that…

A: GIVEN, beta = 1.4 current price (p0) = $16 p1=$18.5 dividend (d1) = $1 risk free rate ( rf) = 5%…

Q: A stock is expected to pay a dividend of $3 at the end of this year (this is Div1), and it should…

A: Dividend (D1)= 3 Growth rate =6.70% Required return =11.90%

Q: AV’s stock is expected to pay a $2.50 dividend at the end of the year (D1 =$2.50). The dividend is…

A: The dividend discount model (DDM) is a quantitative method used for predicting the worth} of a…

Q: PeteCorp's stock has a Beta of 1.37.  Its dividend is expected to be $3.19 next year, and will grow…

A: Given that;Stock beta is 1.37Expected dividend in the next year is $3.19Constant growth rate is…

Q: A stock is selling for $80 in the market. The company’s beta is 1.5, the market risk premium (rM -…

A: As per CAPM Re = Rf + beta x (Rm - Rf) Where: Re = return on equity. Rf = theoretical risk-free rate…

Q: A stock is expected to pay a dividend of $1.00 at the end of the year (i.e., D1 = $1.00), and it…

A: Next dividend (D1) = $1.00 Growth rate (g) = 10% Dividend after 5 years (D5) = D1*(1+g)4…

Q: A stock is expected to pay a dividend of $1.75 at the end of the year (i.e., D1 = $1.75), and it…

A: Using dividend discount model

Q: A stock is expected to pay a dividend of $1.00 at the end of the year (i.e., D1 = $1.00), and it…

A: FORMULA  Stock's expected price 4 years from today = D5/(i-g) Where D5 - Dividend after 5 years from…

Q: You are considering an investment in General Electric’s common stock. The stock is expected to pay a…

A: Given, Risk free rate 5.6% Market risk premium 6% Beta 0.9   Current Price (P0) = $25 Expected…

Q: A stock is expected to pay a dividend of $1.99 at the end of the year. The required rate of return…

A: As per the  dividend discount model , the value of the company stock is the instrinsic value or the…

Q: A stock is expected to pay a dividend of $1.75 at the end of the year (i.e., D1=$1.75), and it…

A: Given details are: Expected dividend (D1) = $1.75 Growth rate (g)= 3% = 0.03 Required return (re) =…

Q: A stock is expected to pay a dividend of $2.25 at the end of the year (i.e., D1 = $2.25), and it…

A: Expected dividend (D1)= $2.25 Growth rate (g) = 8% Required return (r) = 12%

Q: ou are considering an investment in the common stock of Keller Corp. The stock is expected to pay a…

A: Cost of equity is the minimum rate of return required to earn on the equity capital in such a manner…

Q: A share of stock with a beta of 1.20 now sells for 55. Investors expect the stock to pay a year-end…

A: Expected price of the stock refers to the market value of all dividends that will be paid by a stock…

Q: A stock is trading at $80 per share. The stock is expected to have a year-end dividend of $4 per…

A: Gordon's growth model is one of the most commonly used variations of the dividend discount model.…

Q: A common stock is expected that the earnings and dividends will grow at a rate of 25% for the next 4…

A: Growth rate up to 4 years = 25% Growth rate after 4 years = 0% Current dividend (D0) = P 1.25 Beta =…

Q: The current price of XYZ stock is $27 per share. If the required rate of return is 0.13 percent, and…

A: Current price = $27 Required return = 0.13 Growth rate = 0.055

Q: A stock is expected to pay a dividend of $1.25 at the end of the year (i.e., D1 = $1.25), and it…

A: As per DDM, Current stock Price = D1 /(ke-g) D1 = $1.25 growth rate (g)= 4% Required return (ke) =…

Q: AV’s stock is expected to pay a $2.50 dividend at the end of the year (D1 =$2.50). The dividend is…

A: Cost of new equity is the cost of newly issued shares that take into account the risk free rate and…

Q: Crisp Cookware’s common stock is expected to pay a dividend of $3 a share at the end of this year…

A: Given the CAPM's critics and the presumptions underlying its usage in portfolio development, it may…

Q: A stock is selling for $80 in the market. The company’s beta is 1.5, the market risk premium (rM -…

A: The Dividend Growth Model refers to a model that helps in calculating the intrinsic value of a stock…

Q: A stock is expected to pay a dividend of $2.75 at the end of the year (i.e., D1 = $2.75), and it…

A: The below expression can be used to calculate dividend in year 2. The dividend after 1 year is…